back to article From toothbrushes to coffee makers to computers: Europe fines Asus, Pioneer, Philips for rigging prices of kit

The European Commission has sent a slightly belated message to the consumer electronics industry that it frowns upon price fixing, this week fining four manufacturers a total of €111m (US$130m, £99m) for breaking European rules as long as seven years ago. The companies on the business end of the regulators are Asus, Denon & …

  1. James 51 Silver badge

    It will be interesting to see if there are follow up cases. The shops could get back some lost revenue but would that damage their relationship with the supplier? I wonder if there is any legal protection for the shops in that case.

    1. Wellyboot Silver badge

      >>any legal protection for the shops in that case<<

      Very little, how do you show proof of the value of lost sales for model X (to a legal standard) when the competition is constantly changing, that's why they tipped off the regulators.

      The issue here is in attempting to prevent free market retail pricing from emerging due to competition, retail outlets would also have been fined if they had been in collusion to fix prices.

    2. Kubla Cant Silver badge

      Never mind shops getting back lost revenue, how about consumers being refunded for overcharging? If the price-fixing manufacturers had to shoulder the cost of locating everyone who bought the overpriced goods and offering a partial refund it would right a wrong and be a costly deterrent.

      1. Yet Another Anonymous coward Silver badge

        Ironic really since this protected the high st shops.

        Now a certain south american river can heavily discount any product in europe to loss making levels, drive any competition out of business and then have a monopoly - then get to dictate to the manufacturer what the new wholesale price is

        1. John Brown (no body) Silver badge

          "Now a certain south american river can heavily discount any product in europe to loss making levels, drive any competition out of business and then have a monopoly "

          That's when the predatory pricing investigations starts.

          1. Yet Another Anonymous coward Silver badge

            That's when the predatory pricing investigations starts.

            But the court has just ruled that the retailer can charge whatever they want your honour !

      2. Joe Harrison Silver badge

        Yes not unknown for overcharged purchasers to get compo after this kind of legal case. Usually something useless though like three quid voucher off your next purchase.

  2. jmch Silver badge
    WTF?

    ?WTF?

    Surely any online retailers buy their goods at a wholesale price set by the manufacturer which is broadly similair* for all resellers, whether they are online or physical. If a reseller is selling at a lower price, that is surely coming from the resellers cut, not from the manufacturers. So why should the manufacturer care?

    * I presume there are some volume discounts

    1. James 51 Silver badge

      Re: ?WTF?

      I can't remember its name but years ago a luxury clothing line released a cheaper line of clothes and its profits doubled for about two years and then collapsed. It was a long time in recovering. As it was no longer seen as a top end luxury line, it lost its allure so there could be an element of brand protection. There is also a phenomenon were shops use sales to shift inventory, then people get into the habit of waiting for sales to buy anything. That creates a downward spiral and the suppliers would rather have a steady flow of sales than stop/start unpredictability.

      1. Wellyboot Silver badge

        Re: ?WTF?

        >>suppliers would rather have a steady flow of sales than stop/start unpredictability<<

        Yes thats one of the daily problems encountered in running any business and a reason why 'Big-co' top management pay themselves serious amounts of cash.

        Many suppliers would also like to have - zero competition - a legal obligation for consumers to buy their products on a regular basis & no tax or wages to pay. Luckily we currently live in a period where a decent standard of living can still be obtained on an average wage in most of the country, getting a job with the said average wage on the other hand is not as easy as it used to be.

    2. Anonymous Coward
      Anonymous Coward

      Re: ?WTF?

      "If a reseller is selling at a lower price, that is surely coming from the resellers cut, not from the manufacturers. So why should the manufacturer care?"

      Public perception. Sometimes, it's a bad thing for your product to be cheaper than a competitor, as the consumers perceive it to be inferior. For instance, I have seen a $1,000 pair of headphones referred to by an audiophile as "they're too cheap to be any good". Probably only really applies to manufacturers who want to be seen as "luxury" or "premium" manufacturers (so, possibly Marantz out of the list), but ...

      1. Wellyboot Silver badge

        Re: ?WTF?

        >>$1,000 pair of headphones referred to by an audiophile as "they're too cheap to be any good"<<

        Said audiophile must have the hearing ability to make a bat jealous.

        1. LDS Silver badge
          Devil

          "Said audiophile must have the hearing ability to make a bat jealous."

          It's the empty echo chamber between the ears that makes such kind of audiophiles so sensitive...

        2. theblackhand

          Re: Said audiophile must have the hearing ability to make a bat jealous.

          Careful....he can hear your thoughts...

        3. Helen Highwater

          Morons

          People with enough money to make comments that idiotic will already be sufficiently old that are-relatd hearing loss will have already started - "audiophile" stuff along with the overpriced cable scam are hysterically funny.

          As for Denon - they should have been laughed out of business years ago

          https://www.cnet.com/news/denons-500-ethernet-cable/

      2. LDS Silver badge

        Re: ?WTF?

        Canon is know for its MAP (minimum advertised price) policies, for example, to discourage resellers to make "special offers" outside its own ones.

        It's a way to protect revenues by not allowing buyers to "get used" to lower prices, and, for example, making new product look "too expensive" when they are usually introduced with higher margins that will let them be discounted later when the novelty has gone and they are close to be replaced.

        You usually need to be among the market leaders to attempt those policies.

        Still, MAP is not MSRP, which is an attempt to fix the minimum retail prices. You can still sell at lower prices, but can't advertise them.

        1. simmo

          Re: ?WTF?

          > Canon is know for its MAP (minimum advertised price) policies, for example, to discourage resellers to make "special offers" outside its own ones.

          MAP sounded dodgy to me. A quick search found this comment: "Minimum advertised pricing is not legal in either the UK or Europe as it infringes the Competition Act in the UK and the general EU provisions concerning competition law in the EU. Essentially, any agreement between a manufacturer and distributors as to pricing is caught by these provisions. Competition law demands that there be free pricing by all competing in a market. Any attempt to set pricing is caught by the competition law provisions. This essentially takes all ability to price a product out of the hands of the manufacturer and ensures that it is the free market which sets the price, and the mark-up on the product. This law applies equally to e-commerce as it does to other forms of buying and selling."

      3. Alan Brown Silver badge

        Re: ?WTF?

        "Public perception. Sometimes, it's a bad thing for your product to be cheaper than a competitor, as the consumers perceive it to be inferior. "

        The oft-cited example is Remington razors. Victor Kiam really did like them so much he bought the company - but he promptly doubled the price and repositioned the product as a high end brand - which quadrupled sales without any change in actual quality.

    3. Anonymous Coward
      Anonymous Coward

      Re: ?WTF?

      Stella Artois used to do all that they could to keep the price of their lager high in shops as "24 bottles for £5" offers might cause a short term increase in sales but in the longer term were considered to erode the "reassuringly expensive" reputation (and the connection with "high quality" which got associated with that) that the were keen to maintain!

      So, one reason to keep prices up is to avoid the brand being seen as a "cheap value brand" if they want it positioned as high quality.

      1. Aladdin Sane Silver badge

        Re: ?WTF?

        Look at Burberry's recent bonfire.

    4. 2+2=5 Silver badge

      Re: ?WTF?

      > If a reseller is selling at a lower price, that is surely coming from the resellers cut, not from the manufacturers. So why should the manufacturer care?

      It's easy to spring up a box-shifter company overnight on the web, sell until the market is saturated and profits collapse, then fuck off. By then, any reputable supplier online has gone out of business and the manufacturer no longer has any sales outlets online, let alone reputable ones.

      1. Anonymous Coward
        Anonymous Coward

        Re: ?WTF?

        aha, so China then?

    5. Persona

      Re: ?WTF?

      It also stops the retailer from pressuring the supplier to drop their prices as the supplier can point at the healthy margin. When retail price competition is fierce the retailers all want a better deal from the supplier to bolster their bottom line and they can use the argument that they will stop selling it if they can't make any money on it.

  3. K Silver badge

    "all four accused of pressuring online retailers from discounting"

    The EU is a bit bipolar when it come to fixing of prices. It was only a few days they were slapping a distie for importing Cisco grey-kit

    https://www.theregister.co.uk/2018/07/05/distributor_bosses_had_7figure_settlement_to_cisco_for_dodgy_importing/

    Which is practically the same thing, as Cisco would be rigging a higher EU price when compared to other markets.

    1. LDS Silver badge

      "The EU is a bit bipolar when it come to fixing of prices."

      You're conflating two very different issues. And especially since companies have some protection from gray market products, they should not be allowed to try to fix prices.

    2. Jon 37

      Re: "all four accused of pressuring online retailers from discounting"

      They’re different things. A manufacturer can stop their trademarked product being imported into the EU without their permission. Once the product is inside the EU single market, the manufacturer can’t control the price retailers sell it for.

  4. Anonymous Coward
    Anonymous Coward

    EUR > USD

    I know El Reg is more used to working in units like 'brontosaurs per cubic fortnight', or whatever, but I think there might be an error in "€111m (US$30m, £98m)" - unless Trump's trade war has had a remarkable affect overnight...

    1. FrankAlphaXII Silver badge

      Re: EUR > USD

      Yeah, at the moment the Euro is at $1.17 and .89 Sterling.

      You might want to submit a correction at the bottom of the article, though I may beat you to it.

    2. cupperty

      Re: EUR > USD

      Superb choice of units .. !

  5. Frenchie Lad

    They're still at it!

    In France Phillips & Co (and they all do it), have the simple solution to give the same model a slightly different model number to every different distributor and which of course by coincidence have the same price. You look up say a LG washing machine on the manufacturer's web page then you find that stores like Darty, aka Currys etc, do not have the exact model number but at that price there happens to be a similar model from the same manufacturer.

    Wonder if the EU will ever decide to investigate such practices?

    1. paulf Silver badge
      Alert

      Re: They're still at it!

      I always thought different retailers having the same units, with the same base model number, but appended with very slightly different suffixes which vary in each retailer was to protect retailers, rather than the manufacturers. It meant a retailer could claim you won't find this model cheaper elsewhere - then when another retailer discounts that model they simply point out the single character difference in the model number and their promise holds (to the letter, but perhaps not the spirit).

      1. Wensleydale Cheese Silver badge

        Re: They're still at it!

        "It meant a retailer could claim you won't find this model cheaper elsewhere"

        I discovered this in the mid 80s when fridge shopping. Each major retailer had their own flavour of a particular fridge, and there were slight differences in the layout of shelves and compartments.

        Forever after, I've been highly cynical about offers of "Find another outlet that's cheaper and we'll refund the difference"

        What I ended up doing was finding an privately owned shop and spoke to the owner, who was more than happy to beat the prices of the main contenders.

    2. charlieboywoof

      Re: They're still at it!

      Not while they're at the banquet, may take some time, hhhiicckkk

    3. Stuart Halliday

      Re: They're still at it!

      Absolutely immoral.

      They do that to get around the rules.

      Supermarkets often sell items which look superficial the same as elsewhere. But in fact they've removed features and hope the customer doesn't spot the difference.

      Most buyers don't know about this practise. It creates more profits.

    4. Voland's right hand Silver badge

      Re: They're still at it!

      They are not alone either.

      Try finding a Giant bicycle or any part of for anything differing even 1£/1Eu from the RRP online.

      That still does not prevent people buying them and retailers selling them.

  6. Tigra 07 Silver badge

    But why?

    Surely if the retailer sells more they then buy more stock from the manufacturer? The manufacturer gets paid either way so there's no logical reason to push the retailer's prices higher since they're cutting their own profits?

    Can someone explain that?

    1. Anonymous Coward
      Anonymous Coward

      Re: But why?

      You don't need explaining to. You need to research and learn about economics.

      See Apple, Amazon or Sonos or similar companies. Same product, anywhere is the same price from everyone. Either due to there being only one seller, or there being only one SKU. They sell at very strict prices so no one can ever undercut their direct store or exact profit margins.

    2. Stuart Halliday

      Re: But why?

      You don't want your product getting sold cheaper as this leads to pressure to do price cuts for other retailers.

  7. Tigra 07 Silver badge
    IT Angle

    Was Maplins involved and keeping all their prices artificially high due to orders from manufacturers...Or were they just a very expensive retailer?

    1. Douchus McBagg

      Actually I think Phillips and probably other big names had Maplins - and also i'd hazard a guess curries/pcworld; by the short and curlies on this. As suspiciously, their in-store pricing was exactly the same as on line.

      Infact Maplins had a slight edge here because of their repeat purchase discounts. you know, 5% off if over £20 spend, 10% off if over £50 within 7 days, 28 days... I can't remember... anyway, all academic now...

    2. Stuart Halliday

      Oh we had all sorts of restrictions...

  8. Chris G Silver badge

    They should take a look at a lot of the power tool manufacturers like Bosch, Dewalt and Milwaukee. Many of their prices are absurd, particularly as I notice the quality has dropped on a lot of tools from the higher end makers.

    They all seem to want you to replace more often but at a premium price, you are lucky if anything lasts as much as ten years (a lot is fine tuned to clap out the day after warranty expires), fridges would often last twenty years, five is good now.

    On the warranty thing , I see a future where IoT connection could be abused with regard to 'trabsmitted failure' but then I'm just a paranoid old geezer.

    1. Anonymous Coward
      Anonymous Coward

      That's not paranoid.

  9. Douchus McBagg

    I gave up on "expensive=good" power tools a while ago. It just seemed to mean that it'd get nicked, or lent out on "permanent loan" never to return. now I pick up store brand gear and if a motor burns out, just throw it away. Annoyingly, my £40 cordless drill is still going strong to the point where it feels like its going to be a family heirloom.

    same for laptops. fancy bag/slip/skin = stolen in the near future. shonky bag = forever friend.

    don't underestimate the power of a coffee ring or two and a dent to reduce the thievability of gear.

    1. Dave K Silver badge

      Yep, where I work, shonky mouse and tattered USB Micro cable = always on desk. Shiny mouse and Lightning cable = nicked within a week if you forget to lock them in your drawer at night.

    2. Palladium

      In my book, anybody strictly adhering to the "Expensive = good" mantra is a sucker with their money soon parted. I got an SSD bracket from an Ebay china seller which is the exact the same thing, minus the marketing, as a Corsair branded unit except at 1/4 of the price.

  10. Stuart Halliday

    In Maplin, big brands wouldn't sell their products unless you'd guarantee a minimum sales number per month.

    You were restricted to how low you could sell their products.

    Even Apple would restrict us on how close other products could be to theirs!

    If you had walked into Maplin, you would think we didn't sell Apple products.

    Apple wanted a minimum of 1 metre distance from others and dedicated areas with just their products. Hardly achievable in a ordinary shop.

  11. pɹɐʍoɔ snoɯʎuouɐ
    Megaphone

    one of the tactics they use that grinds my gears that appears to be legal is the way they supply exactly the same item but with a different product number.

    Its only a sing letter or number in a prefix that's different, but the product is identical.

    the swindle begins when its only one retailer that sells that item number. The retailer will claim that if you can find the same item cheaper they will refund twice the difference, except that product number is not available anywhere else. even though the exact same item can be found cheaper, but the product number is different.

  12. ukaudiophile

    Common practice in Hi-Fi & home theater

    I am surprised it has taken this long to feel the collars of an audio company over this practice.

    It was common practice to 'discourage' discounting for HI-Fi and home theater equipment. The more expensive equipment was either sold direct my the manufacturer or only by one, maybe two, distributors. No-one sold at discount, because they made big margins, and anyone caught advertising prices below retail might find 'supply' difficulties. Highly questionable, but it went on for years. One major US based speaker brand once boasted how they had huge number s of dealers supporting their products because of the high margins (over 40%) and that their advertised pricing was rigidly policed, anyone discounting would find themselves removed from their authorised dealer program, so either lost margin or lost access to parts of the product range. Always wondered if this activity was legal, but it certainly prevented competition to give the consumer a better deal. The high margins also killed the trade in value of anything you purchased, I quickly resorted to only buying used equipment.

  13. Anonymous Coward
    Anonymous Coward

    Oil industry has been doing this for years

    I thought the Oil industry has been doing this for years?

    Can Europe fine them and make my fuel cheaper?

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