EU fines global electronics giants for online price fixing

EPA-EFE/STEPHANIE LECOCQ

EU Commissioner for Competition Margrethe Vestager, from Denmark, speaks at a news conference on the concurrence case with electronics manufacturers Asus, Denon & Marantz, Philips and Pioneer at the European commission in Brussels, Belgium, 24 July 2018.

EU fines global electronics giants for online price fixing


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The European Commission on Tuesday handed down an €111 million fine on four consumer electronics manufacturers for fixing online resale prices.

The companies caught in the Commission’s crosshairs include Dutch Philipps, Japanese Pioneer, and Denon & Marantz, and Taiwanese Asus. The companies have, according to EU watchdog and Competition Commission Margrethe Vestager’s team, prevented online retailers from proposing lower prices by threatening or blocking supplies. This strategy has influenced pricing algorithms used by the retailers.

The four companies saw their fines reduced after they opted to cooperate with the Commission. “All four companies cooperated with the Commission by providing evidence with significant added value and by expressly acknowledging the facts and the infringements of EU’s antitrust rules,” according to the Commission.

The EU executive has, therefore, applied a 40% reduction to Asus, Denon & Marantz, and Philips’ fines, that have reached €63.533 million, €7.719 million, and €29/828 million in total. Pioneer received a 50% reduction of their €10.173 million fine.

The case against the four manufacturers alleges that they intervened with online retailers, who offered similar products, at lower prices, while 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.

These tactics limited effective price competition between retailers and led to higher prices with an immediate effect on consumers.

Asus monitored the resale price of retailers for certain computer hardware and electronics products such as notebooks and displays in Germany and France between 2011 and 2014, while 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. The same practice was emoplyed by Phillips in Germany and France between 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

For products that included iPod speakers, speaker sets, and hi-fi products, Pioneer also limited the ability of its retailers to sell-cross border to consumers in other EU member states. 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).

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