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The European Commission on Tuesday decided to impose a total of 111 million fines on four electronics and appliance manufacturers for raising prices online. It is Asus, Denon & Marantz, Philips and Pioneer.
– More than half of Europeans buy on the Internet. As a result of the activities undertaken by four companies, millions of them have obtained higher prices for household appliances, hair dryers, laptops, headphones and many other products – Margrethe Vestager, European Commissioner for Competition
Long years
] The four-year business practice ended in 2015, when the EC carried out unannounced inspections in their offices. The investigation showed that Asus, Denon & Marantz, Philips and Pioneer were using the so-called "fixed or minimum selling price" limiting the ability of its online retailers to set their own prices for consumer electronics products.
Each producer intervened with sellers who offered products that were allegedly too cheap. If retailers did not meet the prices charged by producers, they risked sanctions, such as blocking deliveries. Vestager indicated that the interventions were already taking place at a price of 1 euro lower than expected and could result in a price increase of 100 euros
Broader influence
This mechanism is reflected in the operation of the whole market. Many vendors, including the larger ones, use pricing algorithms that automatically adjust retail prices to competitors' prices. Thus, price restrictions imposed on low-cost Internet retailers have generally had a greater impact on the online prices of consumer electronics products.
– Advanced tracking tools allowed manufacturers to effectively track changes in resale prices. lower prices – stressed the EC. Such actions are inconsistent with EU antitrust regulations. Interventions Limit Competition Between Retailers and Result in Price Increases
Breaking the Law
The four companies admitted to breaking the law and, through cooperation with the EC, avoided full-time sanctions. Pioneer got the biggest 50% discount, and the other three companies reduced their penalties by 40%. Vestager explained that the difference is due to the cooperation and value of the evidence provided
Asus, then Philips – 29.8 million euros, Pioneer – 10 million euros and Denon & Marantz – 7.7 million euros
Illegal practices took place in the markets of Western Europe. Taiwanese Asus, for example, monitored retail prices for some computer and electronic products in France and Germany. Japanese Denon & Marantz has tried to keep high prices on audio and video products such as headphones and speakers in Germany and the Netherlands. On the other hand, Philips Netherlands has been involved in price cuts for consumer electronics, such as kitchen appliances, coffee makers, vacuum cleaners, cinemas and video systems, electric toothbrushes, hair dryers and trimmers. in France
A more sophisticated strategy has been adopted by the Japanese pioneer. Not only has he monitored the prices of his home theater devices, loudspeakers or hi-fi products, but he has also limited opportunities to sell equipment to consumers in other member countries. Germany, France, Italy, Great Britain, Spain, Portugal, Sweden, Finland, Denmark, Belgium, the Netherlands and Norway
The treaty bans inter-company agreements that prevent, restrict or distort competition in the single European market . . Any person or company affected by anti-competitive behavior may bring the case before the courts of the Member States and claim compensation
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