Major electronics manufacturers fined for fixing online resale prices

8.3.2018

The Commission has imposed fines totalling EUR 111 million on ASUS, Philips, Denon & Marantz and Pioneer for sanctioning retailers selling their products at prices below their recommended resale prices. It is the first time in 15 years that the Commission imposes fines for retail price maintenance, but the Commission has recently focused increasingly on online sales and electronic price monitoring.
The Commission’s decision of 24 July 2018
By assistant attorney Kristine Langgaard Stage

The Commission has, in four separate decisions, fined consumer electronics manufacturers for sanctioning their retailers’ sale at prices below the recommended resale prices. Both ASUS, Philips, Denon & Marantz and Pioneer have used electronic tools to monitor their online retailers’ resale prices. If a retailer sold a product at a lower price than recommended by the manufacturer, the manufacturer would ask the retailer to increase the price. If the retailer refused to do so, the manufacturer would stop deliveries. Thus, the four manufacturers have restricted competition among their retailers and kept up prices artificially.

The four manufacturers now face fines ranging between EUR 7 million and EUR 64 million. According to the Commission, each fine has been reduced by 40-50% as a result of the companies’ cooperation with the Commission in connection with the investigations, in particular their admission of the offence at an early stage.

Focus on online sale and electronic price monitoring

Online sales account for an increasing share of all sales in Europe, causing both advantages and disadvantages to consumers. The Commission has therefore increased its focus on online sales, and Competition Commissioner Margrethe Vestager has pointed to the adverse effects of electronic price monitoring, emphasising that the area is in the Commission’s spotlight.

In this case, the manufacturers had monitored the retailers’ prices. Som retailers had also used automated price agents, adjusting their prices automatically according to their competitors’ prices. This combination has probably increased the effect of the manufacturers’ anti-competitive behaviour as an upward adjustment of the lowest prices on the market has made the other retailers follow suit. The practices at the retail level were not part of the Commission’s investigations, but the Commission is expected to focus also on the anti-competitive effects of such pricing algorithms.

Read the Commission’s press release.