The UK's competition watchdog, the Competition and Markets Authority (CMA), has urged online sellers and suppliers of automated re-pricing software to learn from the example of a seller on Amazon Marketplace which was fined £160,000 for engaging in illegal price-fixing.
Trod and GB eye used Amazon Marketplace to sell various products direct to consumers. They were competing sellers of posters featuring pop stars such as Justin Bieber and OneDirection. GB eye was also active at the wholesale level, as a supplier of posters and frames to other online retailers, including Trod.
Trod complained that GB eye was undercutting it on price, arguing that it was in GB eye's interest not to undermine the position of key customers of its wholesale business (which accounted for the majority of GB eye's turnover). This led both companies to enter into an arrangement not to undercut one another on price, which lasted from 2011 until 2015, when GB eye effectively "blew the whistle" on Trod by reporting it to the CMA. GB eye's whistleblowing meant that it was granted leniency by the CMA, giving it immunity from fines, provided that it cooperated fully with the investigation. Trod eventually reached a settlement with the CMA under which it agreed to pay a fine of £163,371 – although as Trod has now ceased trading, it remains to be seen whether this amount will be recovered.