The Netherlands Authority for Consumers and Markets (ACM) announced a hefty fine of 8 million euros (US$8.6 million) on electronics giant LG for allegedly engaging in illegal price-fixing of television sets through a scheme with seven major retailers.
According to the regulator, LG had been abiding by agreements reached between 2015 and 2018 regarding online prices for their products, which directly impacted competition between retailers. This regulation resulted in higher prices for the consumer as retailers were not able to set their own prices, and LG actively discouraged them from advertising specials and lowering prices.
ACM Chairman, Martijn Snoep expessed his disappointment in a recent statement, “Under the pretense of ‘price recommendations’, LG coordinated price increases of retailers to the recommended price that LG provided. LG’s practices disrupted competition between the retailers, and that resulted in higher prices for consumers”
LG has been found to have taken measures to ensure market prices of their products were not undercut by other retailers by confronting them if they charged lower prices than the recommended one, and demanding that they increase their prices. Documents and messages obtained by the ACM have shown to countless of incidents where LG sacrificed consumer prices to maintain their own outcomes.
The penalty on LG is meant to serve as an example for other businesses across the Netherlands, as consumer protection rests on principles of fair competition and ethical trading. This will ensure that in the future, consumers are able to benefit from open and transparent markets, and unethical practices are penalized.
Source: NL Times