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EU Slaps $130 Million Fine on Four Electronics Firms For Fixing Online Prices (cnbc.com)
The European Commission imposed a fine of 111 million euros ($130 million) on four consumer electronic firms Tuesday, for fixing prices on their resold items. From a report: Asus, Denon & Marantz, Philips and Pioneer all limited the ability of online retailers to price items as they saw fit. The four manufacturers apparently threatened or sanctioned the online retailers who wouldn't comply with their price suggestions. "These well-known manufacturers of consumer electronics, they put pressure on online retailers to maintain higher prices. They did so during a period from 2011 and 2015," Margrethe Vestager, the European competition commissioner, said in a press conference Tuesday. "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," Vestager said, adding that this behavior is "illegal under EU antitrust rules."
If price fixing nets more than $130 million in additional profit, stay the course!
I read /. there are always people who claim th EU just tsxrs US companies. Oh wait. I live in Europe and do iunderstand that the EU is not after US companies, but after those that break the law.
Correlation is not causation.
Don't fight for your country, if your country does not fight for you.
No, it's most definitely not common. Almost every country I know off prevents this sort of retail price control by a manufacturer - it is a key part of competition law. That's why when you see the manufacturer list a price it always qualifies it with 'recommended'. They cannot force a retailer to sell it at that price.
I totally understand why these manufacturers were engaging in this activity though. I had the same issue with a specialists electronics company I ran a few years back. Basically, our retailers all started on about 40% margin because they provided a lot of sales effort and after-sales support for the product. They would pay attention to common problems, allocate a staff member to understand the product deeply so they could help the customer, translate guides, hold spare parts etc. We had a network of geographically separate dealers that served us and the customers well. Then online turned up, followed by the GFC, and some of the more desperate dealers started to target customers in other dealer's areas by cutting price. This basically created a blood bath, where dealer margins fell to about 20-25%.
The problem is that along with these price reductions, all the dealers basically became really rubbish at supporting the customer. We had to take over a lot of that support work, and eventually had to push our own prices to cover it (as did our competitors). It was quite frustrating really, because in the end the customer didn't really get a discount, nor each participant more profit. All that happened is we had to take over the distribution and support services ourselves and the retailers become nothing more than online store fronts.
The next inevitable step would have been direct sales from the manufacturer, but I left the business before we got to that.
In the end, I'm not sure customers got a better 'deal' out of the whole thing, but it sure made running what started as a design and manufacturing business a lot more complicated.
You know, most European countries calculate their fines based on your wealth rather than a "flat" fee. The idea is that you don't just get to flaunt your contempt for the law if you're rich because a fine of 500 bucks that would be crippling for someone who makes 1000 a month is pennies for someone who makes millions in bonus payments alone.
So you might want to be careful where you speed, thinking that you can easily pay any fine since you're rich...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.