The European Commission on July 24 fined four consumer electronics makers for imposing fixed or minimum resale prices on their online retailers in breach of EU competition rules. The more than €111 million in fines were in all four cases significantly reduced due to the companies' cooperation with the Commission.
According to the Commission, Asus, Denon & Marantz, Philips, and Pioneer engaged in so-called “fixed or minimum resale price maintenance” by restricting the ability of their online retailers to set their own retail prices for widely used consumer electronics products—such as kitchen appliances, notebooks, and hi-fi products.
“The four manufacturers intervened particularly with online retailers, who offered their products at low prices,” the Commission stated. “If those retailers did not follow the prices requested by manufacturers, they faced threats or sanctions such as blocking of supplies. Many, including the biggest online retailers, use pricing algorithms which automatically adapt retail prices to those of competitors. In this way, the pricing restrictions imposed on low pricing online retailers typically had a broader impact on overall online prices for the respective consumer electronics products.”
Moreover, the use of sophisticated monitoring tools allowed the manufacturers to effectively track resale price setting in the distribution network and to intervene swiftly in case of price decreases, the Commission added. The price interventions limited effective price competition between retailers and led to higher prices with an immediate effect on consumers.
Individual case details
Taiwan-based Asus monitored the resale price of retailers for certain computer hardware and electronics products such as notebooks and displays. The conduct of Asus related to two member states—Germany and France—and took place between 2011 and 2014. Asus intervened with retailers selling those products below the resale prices recommended by Asus and requested price increases.
Japan-based Denon & Marantz engaged in resale price maintenance with respect to audio and video consumer products such as headphones and speakers of the brands Denon, Marantz, and Boston Acoustics in Germany and the Netherlands between 2011 and 2015.
Netherland-based Philips engaged in resale price maintenance in France between the end of 2011 and 2013 with respect to a range of consumer electronics products—such as kitchen appliances, coffee machines, vacuum cleaners, home cinema and home video systems, electric toothbrushes, hair driers, and trimmers.
In parallel to resale price maintenance with respect to products—such as home theater products, iPod speakers, speaker sets and hi-fi products, Japan-based Pioneer also limited the ability of its retailers to sell-cross border to consumers in other member states to sustain different resale prices in different member states, for example by blocking orders of retailers who sold cross-border. Pioneer's conduct lasted from the beginning of 2011 to the end of 2013 and concerned 12 countries: Germany, France, Italy, the United Kingdom, Spain, Portugal, Sweden, Finland, Denmark, Belgium, the Netherlands, and Norway.
According to the Commission, all four companies cooperated by providing evidence with “significant added value and by expressly acknowledging the facts and the infringements of EU antitrust rules.” Therefore, the Commission said it granted fine reductions based on the extent of this cooperation, ranging from 40 percent (for Asus, Denon & Marantz, and Philips) to 50 percent for Pioneer. Specifically, Asus received a fine of €63.52 million; Denon & Marantz, a fine of €7.72 million; Philips a fine of €29.83 million; and Pioneer a fine of €10.17 million.