Margrethe Vestager (previously), the EU’s fire-breathing antitrust regulator, has hit Asus, Denon & Marantz, Philips and Pioneer with $130,000,000 (€111,000,000) in fines for fixing minimum prices at which their goods could be sold online.
The US has all but given up on antitrust enforcement, ever since the Chicago school economists convinced Ronald Reagan that the invisible hand would sort it all out. This has left an antitrust void that the EU has recently stepped into, thanks in large part to Vestager’s ardor.
But this is a bit of a curious case. The one area of antitrust enforcement that the US government still bestirs itself for is price-fixing (specifically, maximum price-fixing). Back in 2013, the FTC went after book publishers for colluding with Apple to set the minimum price for ebooks at $9.99, achieving total victory over the publishers and Apple.
But while the FTC’s price-cops were ready to go to war over $9.99 ebooks, they sat on the sidelines while the electronics companies price-gouged on goods costing hundreds (and sometimes thousands) of dollars.
It’s an important refinement to the US theory of antitrust enforcement: they will not tolerate price fixing, except by very, very large corporations from extremely powerful industries.
It reminds me of when the US blocked the merger of two “super-premium ice-cream” companies because it would result in a single company controlling 90% of a “market” that was more marketing hype than market — right after they declined to take decisive action to curb Microsoft, who had 95% of the operating system market at the time.
“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.”
All four companies saw the fine lowered between 40 and 50 percent because they cooperated with regulators. The final amounts resulted as follow: Asus to pay 63.5 million euros; Denon & Marantz fined with 7.7 million euros; Philips to pay 29.8 million euros and Pioneer owes 10.2 million euros.
EU slaps $130 million fine on four electronics firms for fixing online prices [Silvia Amaro/CNBC]
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(Image: Friends of Europ, CC-BY)
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