• by Ray Schultz , July 24, 2018

The European Commission has hit four consumer electronics manufacturers with fines totaling over €111 million for trying to control retail prices, in violation of the EU’s competition rules. However, the EC reduced the fines because the companies cooperated.

Asus, Denon & Marantz, Philips and Pioneer restricted the ability of online retailers to set their own prices for products, the EC charges. And they threatened to block the supplies of retailers that offered products at low prices,it adds. 

These actions constituted "fixed or minimum resale price maintenance (RPM),” the EC states. 

“As a result of the actions taken by these four companies, millions of European consumers faced higher prices for kitchen appliances, hair dryers, notebook computers, headphones and many other products,” states Margrethe Vestager, EC Commissioner in charge of competition policy. “This is illegal under EU antitrust rules.”

The specific charges were as follows:

Asus, headquartered in Taiwan, monitored the resale price of retailers for such items as notebooks and displays in Germany and France between 2011 and 2014. It was fined €63.5 million, with a 40% reduction.

Denon & Marantz, headquartered in Japan, pursued resale price maintenance for headphones and speakers in Germany and the Netherlands between 2011 and 2015. It was assessed a €7.7 million fine, with a 40% reduction.

Philips, headquartered in the Netherlands, pursued price maintenance for kitchen appliances, coffee machines, vacuum cleaners, home cinema and video systems, and electronics in France between 2011 and 2013. Its €29.8 million fine was cut by 40%.

Pioneer, headquartered in Japan, limited the ability of retailers in 12 countries to sustain retail prices between 2011 and 2013. The countries were Germany, France, Italy, the United Kingdom, Spain, Portugal, Sweden, Finland, Denmark, Belgium, the Netherlands and Norway. The company faced a €10.1 million fine, but that was lowered by 50% 

By using monitoring tools, the manufacturers were able to track resale prices and intervene in the case of price decreases, the EC states.

These practices limited price competition between retailers and led to higher prices for consumers. 

Large online retailers use pricing algorithms that automatically adapt retail prices to those of competitors.

The pricing restrictions had a broad impact on overall online prices for those products, it continues.

The fines were reduced depending on the degree of cooperation. The firms acknowledged the infringements, the EC says.

Vestager notes that the “online commerce market is growing rapidly and is now worth over 500 billion euros in Europe every year. More than half of Europeans now shop online.”