Consumer body warns over minimum pricing

The issuing of minimum-price recommendations could see trade associations fall foul of competition law, the Competition and Consumer Protection Commission has warned

The commission said it was up to individual businesses to decide how much they were willing to charge for their products and services and any recommendations.

The warning comes on the back of a recent investigation by the commission into the display of minimum recommended rates for tour guide services on the Approved Tour Guides of Ireland (ATGI) website.

The ATGI represents tour guides in Ireland who have been accredited by Fáilte Ireland.

Normal price competition

The commission looked into the practice and ruled that the publication of recommended minimum rates meant consumers – in this case tourists and tour operators – were not in a position to benefit from normal price competition between tour guides.

The commission directed the ATGI to remove the list from its website and to inform its members that tour guides must decide individually what price they charge for their services. The ATGI now advises consumers to check fees with individual guides.

Higher prices

“The c

ommission's mission is to make markets work better for businesses and consumers alike," said the commission chairwoman Isolde Goggin.

“Recommendations by trade associations of minimum prices to be charged by their members are likely to distort or eliminate competition and cause consumers to pay higher prices than they otherwise would.”

She said the commission’s action in this case would “allow the market to set prices, thereby benefiting consumers and businesses in the sector”.

Ms Goggin said the commission’s experience of engaging with trade associations suggested their work “sometimes involves collective behaviour which leaves them at risk of stepping outside the boundaries of competition law”.