Record fine for Darty, Boulanger and ten manufacturers

The French competition authority has imposed a record fine of 611 million on twelve companies for price-fixing agreement. Ten are manufacturers of household appliances, the other two retail chains Darty and Boulanger.

Thwarting the rise of e-commerce

The ten manufacturers, including Electrolux, LG, Miele and Whirlpool, allegedly entered into vertical price-fixing agreements between 2007 and 2014. They ‘recommended’ prices to distributors and monitored compliance: those who did not adhere to the prices were punished, for example by stopping or delaying deliveries. Retailers Darty and Boulanger participated on the distribution side, and were hit with fines worth 109 million and 84 million respectively.

The competition authority justified the record height of the fines by pointing out that some of the companies have been fined by the French authorities before. In 2018, several manufacturers and distributors were fined for similar violations, but even stricter enforcement and higher fines appear to be necessary to really deter companies, the watchdog believes.

Benoît Cœuré, president of the French competition authority, said that the companies involved wanted to nip the – then emerging – online competition in the bud. Traditional distributors were given an unfair advantage over the online players, who usually put downward pressure on prices. “This price fixing allowed manufacturers and distributors to benefit from artificially high prices, which was directly detrimental to consumers”, Cœuré said.