Pricing and Online Sales in the Home Appliances Industry
After eleven years of proceedings, the Competition Authority sentences 12 companies for vertical agreements between manufacturers and distributors (ADLC Decision No.24-D-11 of 19 December 2024)
After eleven years of proceedings, the Competition Authority sentences 12 companies for vertical agreements between manufacturers and distributors (ADLC Decision No.24-D-11 of 19 December 2024)
This is a river dispute: old facts, eleven years of proceedings, a 300-page decision: the Competition Authority has imposed a total fine of 611 million euros on several companiesfor cartels on retail prices. These practices, dating from 2007 for the oldest, were revealed by indices provided by the DGCCRF in 2011 and 2012, followed by visits and seizures in 2013 and 2014. The Authority had notified 13 grievances to seventeen companies as well as to the professional organization of the sector.
Some companies had invoked the ten-year limitation period, but the Authority rejected this argument, considering that the suspension of the limitation period induced in the event of recourse against the operations of visits and seizures applies to all the parties to the dispute and not only to those who have actually lodged an appeal against the visits and seizures.
Ten companies agreed to the settlement procedure, implicitly acknowledging the grievances. However, SEB and Boulanger disputed these accusations. The Authority found that SEB actively monitored the resale prices of its products online, regularly communicating recommended prices to distributors and monitoring their application. This strategy aimed to keep prices high, which was considered a restriction by object of competition.
As for Boulanger, the Authority noted its active participation in the manufacturers’ pricing policy. Boulanger not only adhered to the pricing requests, but also monitored other distributors to ensure compliance with these prices. This participation was deemed to be a widespread agreement to reduce competitive pressure.
The decision is in line with European and French case law on vertical cartels. It applies the standard of proof based on a “bundle of indices” with three branches: invitation by the supplier, acquiescence of distributors and implementation of a coercive policy. The practices included coercive measures such as stopping deliveries or prohibiting the sale of certain products.
Added to this was the fact that companies were aware of the anti-competitive nature of their practices sincethey used coded language so as not to reveal the practice.
This again illustrates how the freedom to set prices and the possibility for distributors to sell online are subjects considered particularly serious, which can lead to very heavy penalties.
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