The European Commission has fined consumer electronics manufacturers Asus, Philips and Pioneer for imposing fixed or minimum resale prices on online retailers, in breach of EU competition rules. The fines, totalling over €111 million ($130.04 million), were reduced due to the companies’ cooperation with the Commission. Margrethe Vestager, the commissioner in charge of competition policy, said:
“The online commerce market is growing rapidly and is now worth over €500 billion in Europe every year. More than half of Europeans now shop online. 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.
This is illegal under EU antitrust rules. Our decisions today show that EU competition rules serve to protect consumers where companies stand in the way of more price competition and better choice”.
The companies engaged in so-called “fixed or minimum resale price maintenance (RPM)” by restricting the ability of online retailers to set their own prices for widely used consumer electronics products such as kitchen appliances, notebooks and hi-fi products. They intervened when retailers offered their products at low prices and if those retailers didn’t cooperate, they faced threats or sanctions such as the blocking of supplies, the Commission said.
Moreover, the use of sophisticated monitoring tools allowed the manufacturers to effectively track resale price-setting in the distribution network and intervene swiftly in case of price decreases. The Commision said that price interventions limited effective price competition between retailers and led to higher prices, having an immediate effect on consumers.
In particular, Asus, headquartered in Taiwan, monitored the resale price of 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.
Philips, headquartered in the Netherlands, engaged in resale price maintenance in France between the end of 2011 and 2013 relating to a range of consumer electronics products such as kitchen appliances, coffee machines, vacuum cleaners, home cinema and video systems, electric toothbrushes, hairdryers and trimmers.
As well as RPM of home theatre products, iPod speakers, speaker sets and hi-fi products, Pioneer, headquartered in Japan, also limited the ability of its retailers to sell cross-border in order to sustain different resale prices in different 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).
Asus was fined €63.5 million euros ($74 million), Philips €29.8 million ($34 million) and Pioneer €10.2 million ($11.9 million). Japanese audio technology provider Denon & Marantz was also fined €7.7 million ($8.9 million).
