The Lithuanian Competition Council has fined (12 December) heat pump manufacturer Iglu Tech and its parent company Unit Invest €909,280 for anti-competitive practices that limited competition among distributors and raised prices for consumers. The Council determined that Iglu Tech imposed resale price controls and restricted the discounts distributors could offer, resulting in one of the most serious breaches of competition law.
Investigation Findings
Since June 2021, Iglu Tech entered into agreements with distributors that required adherence to set resale prices and capped end-user discounts. The company monitored distributor pricing through online stores, issuing warnings and threatening to terminate contracts if distributors deviated from its pricing policies.
Despite labeling its pricing as “recommended,” evidence showed Iglu Tech enforced these prices, as revealed in company communications, such as:
- “The prices must be changed by the end of the week… If you believe there is no point in continuing to achieve results together, we can terminate the contract and remove our products from sale.”
- “Discount for the end buyer NOT MORE THAN 7% (if a higher discount is granted, cooperation will be terminated).”
These restrictive practices were applied across Iglu Tech’s distribution network, even in cases where formal agreements were not signed.
Consumer Harm and Council’s Response
The Competition Council concluded that Iglu Tech’s actions hindered competition among distributors, preventing them from setting independent pricing or offering competitive discounts. This ultimately harmed consumers by keeping prices artificially high.
Chairperson Jolanta Ivanauskienė emphasized the harm caused by such practices:
“When distributors compete and independently set pricing, buyers benefit from more attractive prices and larger discounts. By imposing fixed prices and limiting discounts, Iglu Tech harmed consumers across its network.”
Penalties and Legal Recourse
The joint fine imposed on Iglu Tech and Unit Invest reflects the severity of the violation. However, charges against two related companies, Axioma Servisas and Axioma LT, were dropped due to insufficient evidence of their involvement.
Iglu Tech and Unit Invest have the option to appeal the decision to the Regional Administrative Court within one month.
Broader Implications
This case marks the third investigation into price-fixing and discount restrictions by the Competition Council in the past two years, underscoring its commitment to combating anti-competitive practices that harm consumers and stifle market competition.
