Statutory Instrument 1998 No. 1271

The Restriction on Agreements and Conduct (Specified Domestic Electrical Goods) Order 1998

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© Crown Copyright 1998

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"television" means a television receiver as defined in section 1(7) of the Wireless Telegraphy Act 1949[2];

"tumble dryer" means a machine which is - 

(a) designed to dry clothes or other fabrics by means of heated air blown into a rotating drum; and

(b) intended primarily for the use of consumers,

but does not include a machine which is designed to be connected to a gas supply;

"video cassette recorder" means a machine which - 

(a) is designed to:


(i) record television programmes on to video cassettes; and

(ii) play video cassettes so that sounds and visual images recorded on them can be reproduced on a television receiver linked to the machine; and



(b) is intended primarily for the use of consumers; and

"washing machine" means a machine which is - 

(a) designed to wash clothes and other fabrics; and

(b) intended primarily for the use of consumers,

but does not include a machine which is designed to be connected to a gas supply.

Prohibition of recommended resale prices for specified goods
     2. It shall be unlawful for a supplier, by publication or otherwise, to notify to dealers prices recommended or suggested as appropriate to be charged by those dealers for specified goods.

Agreements concerning a dealer's ability to set prices
     3. It shall be unlawful for a supplier to make an agreement, or carry out an agreement (whenever made), to the extent that it restricts, directly or indirectly, a dealer's determination of the prices at which he advertises or sells specified goods.

Prohibition on withholding supply of specified goods from dealers
     4.  - (1) It shall be unlawful for a supplier on grounds other than permitted grounds (as to which see articles 5 and 6) to withhold, or to agree or to threaten to withhold, supplies of any specified goods from any dealer who requests supply of those goods ("the requesting dealer").

    (2) For the purposes of this article, and notwithstanding articles 5 and 6, a ground shall not be regarded as a permitted ground unless that ground is referred to in a written statement of reasons that the supplier gives to the requesting dealer at the time of withholding (or of the threat to withhold) explaining why the supplier has withheld (or threatened to withhold) the specified goods requested from him.

Permitted grounds
     5. For the purposes of article 4, permitted grounds are - 

(a) that the value of the requesting dealer's orders from the supplier of the specified goods requested in the calendar year in which the request is made is, or is likely to be - 


(i) less than a minimum value; or

(ii) more than a maximum value,



set generally by the supplier in relation to orders by dealers for the specified goods requested;

(b) that the order is - 



(i) below a minimum size; or

(ii) above a maximum size,



set generally by the supplier in relation to orders by dealers for the specified goods requested;

(c) that the supplier does not have, and could not reasonably be expected to have in the near future, the specified goods requested available for supply; or

(d) that the supplier - 



(i) has reasonable cause to believe that the price for the supply of the specified goods requested may not be duly paid; or

(ii) has not had sufficient opportunity to conduct reasonable checks on the requesting dealer's ability to pay for that supply.

     6.  - (1) For the purposes of article 4, and provided that all the conditions in paragraph (3) are satisfied, it is also a permitted ground that the requesting dealer does not satisfy one or more of the supplier's criteria.

    (2) "The supplier's criteria" means the criteria used by the supplier to determine to which dealers in the United Kingdom he will supply the specified goods requested.

    (3) The conditions referred to in paragraph (1) are - 

(a) that none of the supplier's criteria - 


(i) relate to, or have the object of increasing or maintaining, the prices at which dealers advertise or sell, have advertised or sold, or are likely to advertise or sell, specified goods; or

(ii) relate to the margin of profit achieved or to be achieved by dealers on the sale of specified goods;



(b) that none of the supplier's criteria apply, or are applied by the supplier, so as to discriminate between different dealers on the ground of - 



(i) the prices at which those dealers advertise or sell, have advertised or sold, or are likely to advertise or sell, specified goods; or

(ii) the margin of profit achieved or to be achieved by those dealers on the sale of specified goods;



(c) that none of the supplier's criteria relate to - 



(i) the question of whether dealers are willing to sell goods to any consumer, or only to certain consumers; or

(ii) the days on, or the times at, which dealers' premises are open for the sale of goods to consumers,



but this subparagraph is subject to paragraph (4);

(d) that the supplier supplies the goods requested to all dealers that meet the supplier's criteria (save in circumstances where a permitted ground under article 5 applies in relation to a particular request for supply); and

(e) that the requesting dealer has been or is given a written statement of the supplier's criteria currently in force in relation to the goods requested.

    (4) Supplier's criteria to the effect that dealers should supply the specified goods requested either wholly or mainly by way of wholesale or wholly or mainly by way of retail shall not be regarded as criteria relating to the matters set out in paragraph (3)(c).

Unlawful discrimination
     7. It shall be unlawful for a supplier to discriminate between one dealer and another in the prices he charges them for any goods on the ground that one dealer has advertised or sold, or is likely to advertise or sell, any specified goods at lower prices than the other.

Unlawful preference
     8.  - (1) It shall be unlawful for a supplier to give any preference to any dealer on the ground of the prices at which the dealer has advertised or sold, or is likely to advertise or sell, any specified goods.

    (2) For the purposes of paragraph (1), a supplier shall be regarded as giving a preference to a dealer where he treats that dealer materially more favourably than he treats another dealer with regard to - 

(a) terms or conditions as to credit, discounts, or other matters;

(b) times or methods of delivery or other matters arising in the execution of the contract between the supplier and that dealer; or

(c) other matters relating to the supply of goods by him to that dealer.

Procuring breaches of articles 4, 7 or 8
     9. It shall be unlawful for a dealer to procure a supplier to contravene the provisions of article 4, 7 or 8.

Directions by the Secretary of State as to compliance measures
     10.  - (1) The Secretary of State may give directions to any supplier of, or dealer in, specified goods to take such compliance measures within his competence as may be specified or described in those directions for the purpose of securing his compliance with this Order.

    (2) "Compliance measures" means steps - 

(a) to introduce, maintain, or develop arrangements to ensure that any directors, employees, or agents of the supplier or dealer do not act in such a way that he contravenes any provision of article 2, 3, 4, 7, 8 or 9; or

(b) (in the case of a supplier) to draw dealers' attention to their freedom to determine the prices at which they advertise or sell specified goods that he supplies to them.

    (3) The Secretary of State may vary or revoke any directions given under paragraph (1).

Registrable agreements
     11. Nothing in this Order shall have the effect that it is unlawful to make or to carry out an agreement in so far as it is an agreement to which the Restrictive Trade Practices Act 1976[3] applies (or would apply if made).

Article 85.3 of the EC Treaty
     12.  - (1) Nothing in articles 4 to 9 of this Order shall have the effect that it is unlawful to make or carry out a provision of an agreement insofar as the making or carrying out of that provision is exempted (as to which see paragraph (2)).

    (2) The making or carrying out of a provision of an agreement is exempted if pursuant to Article 85.3, Article 85.1 has been declared inapplicable in the case of - 

(a) that agreement; or

(b) a category of agreements of which that agreement is a member.

    (3) For the purposes of paragraph (2)(b), the fact that an agreement - 

(a) does not have an effect on trade between Member States; or

(b) does not have as its object or effect the prevention, restriction or distortion of competition within the common market,

shall not prevent that agreement being regarded as a member of a category of agreements in the case of which Article 85.1 has been declared inapplicable.

    (4) In this article - 

"agreement" means an agreement between undertakings, a decision of an association of undertakings or a concerted practice, within the meaning of Article 85.1; and

"Article 85.1" and "Article 85.3" are references - 

(a) to the corresponding Articles of the EC Treaty; and

(b) to Articles 53.1 and 53.3 respectively of the Agreement on the European Economic Area signed at Oporto on 2nd May 1992, as adjusted by the Protocol signed at Brussels on 17th March 1993.

Nigel Griffiths,
Parliamentary Under-Secretary of State for Competition and Consumer Affairs, Department of Trade and Industry

19th May 1998

[2] 1949 c. 54; section 1(7) was added by the Broadcasting Act 1990 (c. 42), Schedule 18, paragraph 1(6).back

[3] 1976 c. 33.back