Competition Commission overturns ban on RRPs on electrical goods
The Competition Commission has formally overturned the ban on RRPs (recommended retail prices) on certain electrical goods, including televisions and AV systems.
The Domestic Electrical Goods Order was introduced in 1998 by the then Monopolies and Merger Commission in an attempt to improve competition in the market, amid suspicions that some upmarket brands were refusing to allow their goods to be sold at a discount.
Last year The Office of Fair Trading recommended that the ban on RRPs on electrical goods be overturned.
Now the Competition Commission has agreed to lift the 1998 Order with immediate effect.
In its final ruling, the Commission says it decided that "a number of changes since the order was introduced have significantly increased competition in the market and removed the need for the safeguards provided by the Order".
Chief among those was the rapid growth in online retailers, often selling goods at a discount over high street stores.
"The Commission also considers that the Competition Act 1998 now provides an effective mechanism to address attempts to fix prices or restrict supply unfairly."
The news will be welcomed by struggling TV manufacturers, who have seen margins eroded and losses escalate.
It will also end the current confusion over the pricing of electrical goods, with certain specialist audio products such as CD players, speakers and hi-fi amplifiers being exempt from the 1998 ruling, while others – such as TVs and DVD/Blu-ray players – were not, leading to a two-tier pricing system.
Presumably, electronics manufacturers and retailers will now return to a system of RRPs on all products.