Commission fines electronics companies for fixing resale prices

On the 24th July, the EU Commission issued fines against four electronics companies for breaching antitrust rules by fixing resale prices on their online retailers.

All four companies, namely Asus, Denon & Marantz, Philips and Pioneer, did not allow their resellers to set their own prices and instead pressured them to maintain a minimum resale price. The fines issued ranged from more than 63 million for Asus to 7.7 million for Denon & Marantz. The fines were reduced as a result of the cooperation of the companies to the investigation. The prime target of this practice were online resellers, who tend to sell their products at lower prices.

As online resellers adjust their prices automatically to that of competitors, the practice had a wide effect on the market. Furthermore, the goods in question were widely used consumer goods from computers to kitchen appliances and personal care products, meaning a significant impact on consumers.

The practice of fixing resale prices is prevalent in online markets and Commissioner Margrethe Vestager highlighted the fact that the online market is ever growing and it is imperative to protect consumers.

What happens to the consumer affected by these high prices in electronics? They can seek damages in court, following Directive 2014/104/EU (The Antitrust Damages Directive) using the Commission decisions as proof of illegal behaviour of the companies.

Record fine for Google for breaching EU antitrust rules: is there anything for consumers?

Earlier this week, on the 18^th of July, the European Commission fined Google €4.34 billion for breaching EU antitrust rules. This is so far the largest fine ever imposed for such violations.

It is now evident that since 2011 Google imposed illegal restrictions on other Android device manufacturers and mobile network operators abusing their dominant position on the markets of: general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system.

In particular Google 1) required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store), engaging in the so called illegal practice of ‘tying’: 2) made illegal payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and 3) illegally prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google. Google's conduct prevented a number of large manufacturers from developing and selling devices based on Amazon's Android fork called "Fire OS".

The antitrust decision requires Google to bring its illegal conduct to an end in within 90 days of the decision. At a minimum, Google has to stop any of the above three types of illegal practices. The decision also requires Google to refrain from any measure that has the same or an equivalent object or effect as these practices. The Commission will monitor compliance with the decision, and in the event of failure to comply, Google can face payment of a fine of up to 5% of its average daily worldwide turnover.

This decision is beneficial for consumers in two ways. First, by stopping the abuse of dominant position, the decision is likely to result in increased competition in the given markets that brings better products and lower prices for consumers. Second, harmed consumers are able to claim compensation in civil actions for damages in their national courts based on the new EU Antitrust Damages Directive.