Britain's consumer watchdog today announced a £4.9m fine for Hasbro, the US maker of Action Man and Monopoly, for breaking competition rules and fixing toy prices.
Hasbro was originally fined £9m but the office of fair trading (OFT) said it reduced the penalty because the company had cooperated fully with its investigation.
The fine is the largest handed out so far under the 1998 Competition Act, which prevents agreements among companies or people that have the effect of "preventing, restricting or distorting" competition.
Hasbro called the fine "disproportionate" and said it planned to appeal against the decision.
"The activities cited by the OFT occurred over a very short period of time and through a limited number of wholesale distributors," the company said in a statement.
"Hasbro believes that such activities had no significant effect on competitiveness within its small network of distributors or on consumers."
The OFT has yet to make a decision on whether British retailers Argos and Littlewoods colluded on setting prices.
The Competition Act allows for a fine of up to 10% of turnover for up to three years.
An OFT investigation found that Hasbro - which also makes Scrabble as well as Harry Potter and Tweenie merchandise - and 10 distributors broke competition law by entering into price-fixing agreements.
These agreements prevented the distributors from selling Hasbro toys and games below Hasbro's list price without permission. But the distributors escaped fines because they had no choice in the matter, the OFT said.
"No fines have been imposed on the distributors as the OFT found that the initiative to impose the prices was Hasbro's and the distributors had no choice but to accept them," the OFT said in a statement.
Hasbro, which makes almost a fifth of the £1.7bn of toys sold nationally, was penalised after a year-long investigation, thought to have been prompted by a tip off from a retailer.
The OFT was recently given increased powers to protect consumers against any breaches of competition law; it can therefore penalise companies financially for any abuses it uncovers.