Asus

The European Commission has levied fines against four consumer electronics manufacturers —Asus, Denon & Marantz, Philips, and Pioneer— for fixing online resale prices.

The fines total over €111 million ($130 million) but have been reduced after the companies cooperated with EU authorities.

EU customers paid more for products because of fixed prices

EU officials say the four companies are guilty of imposing fixed or minimum resale prices on distributors selling their products via third-party online stores.

"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," said Competition Commissioner Margrethe Vestager. "This is illegal under EU antitrust rules."

The EU says that these companies often engaged in threats or even cut off supplies to online retailers who did not adhere to these fixed or minimum prices.

The four companies used automated software that monitored prices at their partner retailers to make sure they followed rules.

Some of these companies also prevented online stores from selling products across geographical regions, a practice specific in the EU, where EU citizens can buy products from any EU country. Vendors prevented stores from serving cross-border customers to make sure they sustained different minimum prices for different EU zones to maximize profits in each zone.

Breakdown of each illegal practice per company

In particular, these are the practices per manufacturer, as detailed by the EU in its decisions:

Asus, headquartered in Taiwan, monitored the resale price of retailers for 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. Asus intervened with retailers selling those products below the resale prices recommended by Asus and requested price increases.

Denon & Marantz, headquartered in Japan, engaged in resale price maintenance with respect to audio and video consumer products such as headphones and speakers of the brands Denon, Marantz and Boston Acoustics in Germany and the Netherlands between 2011 and 2015.

Philips, headquartered in the Netherlands, engaged in resale price maintenance in France between the end of 2011 and 2013 with respect to a range of consumer electronics products such as kitchen appliances, coffee machines, vacuum cleaners, home cinema and home video systems, electric toothbrushes, hair driers and trimmers.

In parallel to resale price maintenance with respect to products such as 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 to consumers in other Member States in order to sustain different resale prices in different Member States, for example by blocking orders of retailers who sold cross-border. 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).

While the EU sanctioned these practices in Europe, they have most likely taken place in other countries across the globe as well.

Companies received fine reductions

These illegal practices could have resulted in higher fines if the four companies did not cooperate with the EU's investigation. The EU says all four companies received large reductions for their fines.

 

Reduction for cooperation

Fine (€)

Asus

40 %

63 522 000

Denon & Marantz

40 %

7 719 000

Philips

40 %

29 828 000

Pioneer

50 %

10 173 000

The EU also encouraged companies that suffered damages from these practices to file legal complaints in national courts and request financial damages.

Last week, the EU fined Google $5 billion for breaking similar antitrust rules with its Android mobile operating system.

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