ASUS, Philips and two others fined for price fixing electronics

ASUS, Philips and two others fines for price fixing electronics

ASUS, Philips and two others fined for price fixing electronics

The European Commission has today issued four fines to consumer electronics manufacturers for participating in price-fixing practices within Europe, keeping the pricing of their devices at artificially high levels. 

These four fines represent four separate cases, with each manufacturer acting independently of the other three. These four investigations were against ASUS, Denton & Marantz, Philips and Pioneer, with fines totalling €111 million. Each of these fines has been reduced thanks to company co-operation with the European Commission.    

Below are details about the illegal practices of each these four companies, which forced higher prices for consumers, stifling competition between retailers.

    The four manufacturers intervened particularly with online retailers, who offered their products at low prices. 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.

Moreover, the use of sophisticated monitoring tools allowed the manufacturers 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.

In particular, 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).

 
ASUS has the largest fine of the three, which totals €63,522,000, which was reduced by 40% thanks to co-operation with the Commission’s investigation. This fine is larger than the other three manufacturers combined, mostly due to ASUS’ sheer size and scale within the electronics market. 

Denon & Marantz was fined €7,719,000, Philips received a fine of €29,828,000 and the Commission issued Pioneer with a fine of €10,173,000. These fines were reduced by 40%, 40% and 50% respectively thanks to varying levels of cooperation with investigators. 

  

ASUS, Philips and two others fines for price fixing electronics

The European Commission’s decision is designed to protect consumers from price-fixing practices and therefore maintain a market where retailers can deliver consumers competitive prices. 

The European Union is built upon the free movement of Goods, People and Services, allowing European Citizens to be offered more consumer choice when it comes to both goods and its place of origin, unhindered by inter-European boarders. The European Commission is designed to protect these consumer rights, aiming to create a fair marketplace for both competition and customers. 

You can join the discussion on ASUS, Philips and other manufacturers receiving EU fines for price fixing on the OC3D Forums.