EU Slaps $130 Million Fine on Four Electronics Firms For Fixing Online Prices (cnbc.com) 108
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."
It's just business as usual... (Score:4, Insightful)
If price fixing nets more than $130 million in additional profit, stay the course!
Re:It's just business as usual... (Score:5, Insightful)
If price fixing nets more than $130 million in additional profit, stay the course!
This is what the other side of the pond doesn't understand about the EU... You treat fines as a one off thing. They aren't. Its 100 million Euro now... but if you don't stop it'll be 300 million Euro extra. The fines are obviously a slap on the wrist compared to what they made from the crime, but that's on purpose to discourage them from retaliatory action (like raising prices). However there is a very clear message that says next time, the slap wont be on the wrist with the EU.
Fines are there to discourage illegal business practices... but not to discourage business.
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You don't get it, do you? If I lock you up, I have to spend money on you. If I fine you, you have to spend money on me.
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This is what the EU doesn't understand about capitalism. The owners of these companies are adults and these punitive measures are not going to make them go. Oh gee, I guess I was doing the wrong thing, I should change.
They are well aware of what they are doing, And they can measure how long they can fail compliance until the fines are no longer fine.
These companies may give millions of dollars to each side in politics so whoever is in power will owe them a favor, at least be willing to lend an ear. Just be
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You fail to understand that they most likely thought they wouldn't get caught. Also, don't forget that this isn't "pay 130m and you can continue your spiel". This is "pay 130m and if we catch you again breaking our law, it gets expensive".
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Oh gee, I guess I was doing the wrong thing, I should change.
Yeah the EU doesn't have a great track record of getting Microsoft to produce a special version of Windows, or getting Facebook to change their data options presented to users, or getting Google to announce they are changing their model for Android if they don't win an appeal.
Oh wait, that's right, pretty much all companies eventually fold when they realised that unlike the USA, EU laws and regulators have teeth.
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Re:It's just business as usual... (Score:5, Insightful)
You're absolutely right.
Businesses should be allowed to do whatever the fuck they want with no one ever holding them accountable.
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Also along with Adrenaline Injectors,which were rasied from $100 to over $1000 per injector whereas in the UK it's £8.60 per injector
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There can be non direct monetary punishments as well.
For example in this case you can order local stores who sell their products to only pay the recommended amount, and put legal protections on these stores to follow these orders (such as not having it count as a debt or hit their credit ratings).
We can also just block shipping of products and turn the ship away.
These are my extremely naive examples, but to the point there are other things that can be done vs. just a fine.
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Yeah, keep increasing the price of medication! Keep underpaying people sewing cheap clothes together in hazardous buildings that are prone to catching fire! Keep spitting out poisonous gases in the refineries!
Need I go on?
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You're absolutely right.
Businesses should be allowed to do whatever the fuck they want with no one ever holding them accountable.
I think that this one needed a satire flag.
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Re:It's just business as usual... (Score:5, Insightful)
Putting repeat fines (we usually call them taxes, but...)
Thank you for telling us within the first 8 words that you don't know what you are talking about, allowing us to avoid wasting time reading everything else you wrote.
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Corporations have been great at dodging taxes. Dodging this one is rather easy, even: Just don't break the law.
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Putting repeat fines (we usually call them taxes, but...) on business *does discourage business*.
Well business are very much welcome to shut up shop and move away from a market that covers close to 1/3rd of the wealthy western world.
This has nothing whatever to do with consumer protection.
Fines given out specifically for violating consumer protection law are nothing to do with consumer protection? That's some next level thinking right there. What's your poison, THC? LSD?
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Bollocks. Melamine was consciously added by scumbags to up the 'protein' count in milk products and increase their pay-out.
it was not found because the Fonterra subsidiary in China do not test for such industrial additives in milk; it is not tested for just like you do not test for cement in orange juice. It is not in the process chain at any stage
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That non-compete agreement? Not enforcable.
Entirely irrelevant. If both companies gain by complying with the agreement they've made, they will continue to comply, even if (and usually causing) consumers lose out.
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Who said that it stays that way? It's 130m now. We'll be back in a couple months. You're still fixing prices? It's 260m. And we'll be back in a couple of months. With 520m.
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It is more complex then that.
The US has its rules and the EU has theirs. They are not always in sync. The degree of corporate freedom to innovate and take risks vs the number of protections the consumers have from bad business practices.
Normally high risk actives lead to the biggest reward. However high risk activities can hurt the consumer the most. While it isn't all or nothing, there is a balance and often this isn't well defined until someone crosses the line. A company if they know the line, will ofte
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Re: This is actual illegal behaviour (Score:3)
The fines are partly based on size. Thus, google, being big, is asked to pay more. It seems reasonably to me that this is a way around the gpâ(TM)s problem.
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This actually drove up prices for EU consumers, where Google provided a free product and got a fine an order of magnitude higher for having an order of magnitude greater net worth.
FTFY
If you want to punish Alphabet/Google, do you think a piddling €5M fine is going to work?
Making the punishment actually hurt seems to be an idea whose time has come. If you get caught speeding in Finland, and you're rich, you're going to get a much higher fine than the poor guy caught doing the same thing. Don't get caught speeding in Switzerland either.
Re:This is actual illegal behaviour (Score:5, Interesting)
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 [dailymail.co.uk], thinking that you can easily pay any fine since you're rich...
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Asus (Score:2)
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Next MB to be Gigabyte.
Dropped support (or never had it) for ECC on AM4? No thanks.
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Isn't this common in consumer electronics retail? (Score:2)
Maybe this is a Canada thing, but I always thought that consumer electronic OEMs set the pricing for retailers to minimize unfair advantages for large companies while also keeping their margins from eroding. In talking to people I know who provide on line web retailers, the same applies there with manufacturers limiting product or raising wholesale costs to companies that offer product at a discount without the OEM's approval.
I didn't think it was done that much with computers (I was surprised to see Asus
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Setting MAPs is legal in Canada: https://www.lexology.com/library/detail.aspx?g=0425169d-f2eb-4f50-aaf3-514aa52f496c
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Thank you for the link. That was instructive.
Re:Isn't this common in consumer electronics retai (Score:5, Interesting)
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.
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You can print it on the book, but then Barnes and Noble can put a giant 30% off sign right above the display. The retailer wins because people don't behave rationally when shopping and think they are getting a "deal" and the publisher wins because they keep the perceived value of a fancy photocopy high. To some extent, the larger and more ridiculous the printed price, the better.
Amazon does something similar with their stupid crossed-out list price, when in practice their prices are usually competitive-to-h
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You may be right with your comment. But in some cases I don't see the benefit for the market.
For example in Germany (and maybe other EU-countries as well) all ebike manufactures press their resellers to keep a certain price. Its just very obvious, because all local shops and online resellers stick to the same price. There is no benefit for the customer, when I look at the online reviews of the ebike shops. Bad customer service everywhere. After some consideration I bought an ebike with Chinese components di
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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.
It's not that they're price fixing (setting their prices and not permitting sales below those), it's that they're enforcing a form of MAP (Minimum Advertised Price), which is illegal in the EU (from my understanding, IANAL).
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The linked story is very light on details, but my first thought was also that it sounded like they were enforcing a minimum advertised price, which is common in the US at least. It is generally seen as a way to ensure online retailers don't undercut the pricing of brick and mortar stores.
It would be surprising that this behavior is consider anti-trust in the EU, but I wonder if their are specific details that makes these companies' actions illegal. Perhaps they cannot threaten the retailers, but instead wou
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It is generally seen as a way to ensure online retailers don't undercut the pricing of brick and mortar stores.
That's just spin. I think the real reason is that they don't want their brand devalued by a lower visible price. This is especially true of Apple. You literally never see a discount on a current-model iPad, though retailers often throw in free gift cards to make the deal better. They do not ever show a lower price than MSRP.
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Somehow Best Buy in the US is allowed to advertise Apple stuff for below retail. Our local Best Buy is a mile or so from an Apple store and they undercut almost every price. Not sure how that works out. As an example, the latest circular has current-model iPads for $30 off. The Apple store is selling them for $329 (full retail) and Best Buy is selling them - advertised - for $299. I guess some people won't travel a mile for $30, but I certainly will :)
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Apple have previous:
https://www.theguardian.com/bo... [theguardian.com]
On hardware too:
https://www.wired.co.uk/articl... [wired.co.uk]
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No. As a manufacturer you can suggest a retail price (MSRP), but once the product is bought by the retailer, they can set whatever price they want, as it is theirs.
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Yes, but the manufacturers and the suppliers are in cahoots with each other. Small retailers don't have any option. Sell the item at below the manufacturer decided price and they risk getting cut off by the supplier.
Lower retailer margin? (Score:3)
Would the result here not be a higher cost of product to retailer, as a way of keeping prices inflated? If this is the case, this would mean that retailers would either need to increase advertised price or have lower margins?
Of course the alternative is other games to keep prices in line, that work around the law?
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Would the result here not be a higher cost of product to retailer, as a way of keeping prices inflated? If this is the case, this would mean that retailers would either need to increase advertised price or have lower margins?
Of course the alternative is other games to keep prices in line, that work around the law?
Ehh.. no!
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It's a tricky situation for a manufacturer. They need to include enough room in the wholesale price for retailers to make a profit, but that then opens space for other retailers to treat a product as a loss-leader (or otherwise accept low margins), which distorts the online market for that product.
Consumers can find and will buy at the lowest price (ish, subject to laziness, trust in the retailer, shipping costs and other factors) so if something is available everywhere within a 10% spread and someone else
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Would the result here not be a higher cost of product to retailer
Price fixing regulations don't focus just on consumers despite what we often read about. It is just as much about not screwing the retailer. This action here hasn't at all been about consumers or the prices we pay.
And yet... (Score:2)
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Apple and Hewlett Packard get a free pass? Come on, EU, how about some consistency?
Because they weren't part of this particular cartel? Apple has been fined before for illegal price fixing with ebook-publishers, but court cases tend to go case by case and not try to resolve all cases in the world in one big clusterfuck.
Huge problem in the US (Score:2)
haggling? (Score:2)
I suspect musical instrument/pro audio is one of the few retail areas where people still haggle. In most retail (especially on-line), the minimum advertised price is the minimum price, period.
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Fender has been recently raided in the UK in connection with doing exactly the same thing, Gibson will most likely get away with it because... well, anyone trying to sanction them for their sales practices is a bit late to the party. Gibson today is not the same as Gibson one or five years ago.
So that you know, the initial complaint about price fixing seems to have been filed by Thomann, who most definitely are in the musical instrument and pro audio category.