The European Union’s antitrust authorities have issued[1] a series of penalties, fining consumer electronics companies Asus, Denon & Marantz, Philips and Pioneer more than €110 million (~$130M) in four separate decisions for imposing fixed or minimum resale prices on their online retailers in breach of EU competition rules.
It says the four companies engaged in so called “fixed or minimum resale price maintenance (RPM)” by restricting the ability of their online retailers to set their own retail prices for widely used consumer electronics products — such as kitchen appliances, notebooks and hi-fi products.
Asus has been hit with the largest fine (€63.5M), followed by Philips (€29.8M). The other two fines were €10.1M for Pioneer, and €7.7M for Denon & Marantz.
The Commission found the manufacturers put pressure on ecommerce outlets who offered their products at low prices, writing: “If those retailers did not follow the prices requested by manufacturers, they faced threats or sanctions such as blocking of supplies. Many, including the biggest online retailers, use pricing algorithms which automatically adapt retail prices to those of competitors. In this way, the pricing restrictions imposed on low pricing online retailers typically had a broader impact on overall online prices for the respective consumer electronics products.”
It also notes that use of “sophisticated monitoring tools” by the manufacturers allowed them to “effectively track resale price setting in the distribution network and to intervene swiftly in case of price decreases”.
“The price interventions limited effective price competition between retailers and led to higher prices with an immediate effect on consumers,” it added.
In particular, Asus, was found to have monitored the resale price of retailers for certain computer hardware and electronics products such as notebooks and...