In a decision dated December 19, 2024, the French Competition Authority (Autorité de la concurrence) fined ten manufacturers and two distributors of household electrical appliances for anti-competitive practices aimed at controlling product sales prices. The effect of these agreements was to restrict intra-brand competition on the online sales channel and maintain higher prices, to the detriment of consumers.
A price cartel detrimental to consumers
Between February 2007 and December 2014, a number of well-known manufacturers – BSH, Candy Hoover, Electrolux, LG, Miele, SEB, Smeg and Whirlpool – as well as distributors Boulanger and Darty, set up a price-fixing mechanism aimed at regulating the sale prices of household electrical appliances.
This mechanism was developed in a context marked by the rise of online distributors, whose more aggressive pricing strategies threatened the balance of the traditional in-store market.
Described as vertical agreements, these practices included :
– The implementation of an illicit selective distribution system: manufacturers imposed the existence of “brick-and-mortar stores” or prohibited the sale of certain products over the Internet.
– Communication of recommended retail prices: The distributors and manufacturers concerned communicated, sometimes in coded form, to better control the retail prices of the products concerned.
– Price monitoring: The retail price instructions issued by offenders were monitored frequently, sometimes even daily, using effective online price monitoring tools, with adjustment requests made when prices were deemed too low.
– Pressure and sanctions: In the event of non-compliance with agreed prices, manufacturers could apply sanctions such as supply restrictions, or even the exclusion of recalcitrant distributors.
The French Competition Authority found that these practices had restricted intra-brand competition in online sales, limiting distributors’ freedom to offer competitive prices and directly penalizing consumers.
A historic penalty and significant amounts
At the end of its investigation, the Autorité imposed a record fine of 611 million euros on the companies concerned, broken down as follows:
– BSH: 189 million euros
– Whirlpool (successor to Indesit): 56 million euros
– Electrolux: 48 million euros
– LG: 27 million euros
– Miele: 15 million euros
– SEB: 39 million euros
– Candy Hoover: 15 million euros
– Smeg : 8 million euros
– Eberhardt : 1 million euros
– Boulanger : 47 million euros
– Darty: 29 million euros
The majority of the companies involved accepted a settlement procedure, acknowledging their responsibility and accepting the penalty. On the other hand, SEB and Boulanger contested the grievances, but were also sanctioned.
Expert advice:
This decision once again illustrates the firmness with which the Autorité sanctions such practices, with the aim of preserving fair competition and protecting consumers against market distortions induced – on any sales channel – by illicit agreements.
To ensure compliance with competition law, it is advisable to :
– Regularly review distribution contracts to ensure that they do not contain any anti-competitive practices.
– Regularly train sales teams in competition best practices.
– Avoid any communication likely to be interpreted as an attempt to influence distributors’ resale prices.
Our law firm assists distribution networks in bringing their commercial practices into compliance.
If you have any questions on this subject, please do not hesitate to contact us.