Legal Updates

Store owners who matched prices in WhatsApp groups committed a felonious restrictive arrangement

April 12, 2021

Gaming stores owners have set up WhatsApp groups, in which they coordinated the prices of game consoles such as PlayStation and Xbox and the prices of various video games such as FIFA, which they advertised on the Zap comparative shopping website which allows store owners to update products prices.
The Court held that the store owners were parties to a criminal restrictive arrangement. The purpose of the Competition Law is to protect the free competition, recognizing it as contributing to efficiency and innovation, lowering prices, improving products and services, and even ensuring equal opportunity to compete in a market that promotes freedom of occupation. A restrictive arrangement is an agreement between parties conducting business, while restricting at least one of them in a manner that may prevent or reduce competition between the parties or even vis-à-vis others who are not part of the arrangement. The gaming market includes both large chains, which control most sales, and small stores such as those ran by members of the WhatsApp groups. The scope of the market is not the only criterion for examining the degree of severity of a cartel, but also the type of coordination performed, the nature of the coordination, its circumstances, the duration of the coordination, when it was discontinued, etc. Here, there was a horizontal price coordination, the competition was among the group members themselves regarding advertising in Zap, and not compared to the big chains. The store owners served as significant "players" in the relevant market at the time, the coordination was done explicitly over a year in several different groups, those involved acted in accordance with the coordination, which was stopped only due to an investigation by the Competition Authority, and therefore the group members were parties to a criminal restrictive arrangement.