Bundeskartellamt imposes fine on the Cologne-based company Fond Of GmbH

The Bundeskartellamt has imposed a fine totalling around 2 million euros on Fond Of GmbH, a company based in Cologne, on account of vertical price fixing. Fond Of specialises in the development and manufacture of school backpacks and school bags under the brand names “ergobag” and “Satch”. The company is accused of having restricted the pricing of school bags and school backpacks sold by retailers cooperating with the company. The proceeding was initiated within the context of a request for official assistance by the Austrian competition authority, which had also investigated the company, and a dawn raid conducted in January 2019.

Andreas Mundt, President of the Bundeskartellamt: “For several years the company Fond Of set minimum prices for its school backpacks and school bags and saw to it that the retailers involved would not undercut these prices. Fond Of systematically monitored their price setting and also imposed sanctions on retailers to enforce compliance with the minimum sales prices. There are good reasons why, already since the 1970s, manufacturers have only been allowed to issue non-binding price recommendations. Vertical price fixing is often to the disadvantage of consumers and can ultimately result in consumers having to pay higher prices. Especially when it comes to school backpacks and school bags, the parents' willingness to invest in their children's health is relatively high. It is absolutely unacceptable to enforce additional vertical resale price maintenance in this area.”

The company Fond Of and the retailers involved agreed that Fond Of products should generally be sold at the price set by Fond Of as a recommended retail price. In addition, at least until 2016, only a small number of retailers were permitted to engage in online sales. From the early stages of their respective business relations (starting from March 2010) until August 2018, Fond Of GmbH as well as the retailers involved monitored compliance with the prices and rules for online sales at regular intervals and called on retailers to comply with these, in some cases even until the dawn raid was carried out in January 2019. Fond Of intervened in the case of deviations from its prices and rules and, except in some cases, the retailers stopped the conduct objected to.

In setting the fine, the authority took into account that the company had cooperated extensively with the Bundeskartellamt and that a settlement could be reached. The order to impose the fine is final. The proceedings against the retailers involved and the persons acting on behalf of Fond Of were discontinued.

A case summary in accordance with Section 53(5) of the German Competition Act (GWB) will be published shortly on the Bundeskartellamt's website