ECN Brief

Germany | Fine Imposed for Resale Price Maintenance in Sale of Portable Navigation Devices

Germany | Fine Imposed for Resale Price Maintenance in Sale of Portable Navigation Devices

The Bundeskartellamt (BKartA) imposed on 12 May 2015 a fine of € 300 000 on United Navigation GmbH, Ostfildern (United Navigation), for enforcing resale price maintenance on retailers selling its products.

From July 2009 to May 2014, representatives of the company agreed with several retailers that the latter would not sell portable navigation devices produced by United Navigation below certain end-customer prices. Individual price agreements had already been concluded in 2007 for the navigation devices sold under the brand names "Becker" and "Falk".   

United Navigation monitored in particular the prices of online retailers. As soon as a retailer dropped its sales price below a certain level, it was asked to maintain the prescribed price level. The so-called "street price" was introduced as an indicator of the price level considered acceptable by United Navigation. This price was communicated to the retailers along with the non-binding price recommendation. Most of the retailers raised their prices after being contacted by United Navigation.

In other instances price increases were achieved under the threat of refusal to supply or of legal action because of the unauthorised use of copyright material, or by granting advantages in the form of bonuses for raising prices.

Retailers are free to set the price they want for a product. Manufacturers cannot stop them from doing so. They can only make a non-binding price recommendation. Resale price maintenance agreements between manufacturers and retailers or the exertion of pressure by manufacturers on retailers to maintain certain price levels are prohibited by Sect. 1 ARC and Article 101 TFEU.

The proceedings were initiated after information regarding the infringement was made available to the BKartA by the Austrian competition authority. This information exchange was followed by inspections.

In setting the fine, the BKartA took into account United Navigation's currently limited financial capacity as well as the fact that it cooperated extensively and that a settlement could be reached. The order imposing the fine is not yet final. The decision may be appealed to the Düsseldorf Higher Regional Court.

 

Posted on 01/07/2015