Summary of Commission Decision

of 24 July 2018

relating to a proceeding under Article 101 of the Treaty on the functioning of the European Union

(Case AT.40181 — Philips (vertical restraints))

(notified under document number C(2018)4797 final)

(Only the English text is authentic)

(2018/C 340/07)

On 24 July 2018, the Commission adopted a decision relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003 (1), the Commission herewith publishes the names of the parties and the main content of the decision, including any penalties imposed, having regard to the legitimate interest of undertakings in the protection of their business secrets.

1.   INTRODUCTION

(1)

The Decision is addressed to Koninklijke Philips N.V. and Philips France S.A.S. (collectively ‘Philips’). Koninklijke Philips N.V. is a technology company headquartered in the Netherlands. During the infringement period Philips France S.A.S. was a wholly-owned subsidiary of Koninklijke Philips N.V.

(2)

The Decision relates to a single and continuous infringement of Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’). In violation of Article 101 TFEU Philips France S.A.S. implemented practices in relation to products sold by its Consumer Lifestyle business organisation, aimed at restricting the ability of retailers in France to determine their resale prices independently.

2.   CASE DESCRIPTION

2.1.   Procedure

(3)

The case against Philips originated from unannounced inspections on 3 December 2013 at the premises of Philips in the Netherlands and Philips S.p.A. in Italy for suspected resale price maintenance (‘RPM’) with regard to Philips' Consumer Lifestyle products. Subsequently, Philips indicated its interest to cooperate with the Commission and submitted further evidence regarding the relevant conduct.

(4)

On 10 March 2015, the Commission carried out an unannounced inspection at the premises of an online retailer in France selling inter alia Philips' products.

(5)

On 2 February 2017 the Commission opened proceedings with a view to taking a decision under Chapter III of Council Regulation (EC) No 1/2003.

(6)

Subsequently, Philips submitted a formal offer to cooperate in view of the adoption of a decision pursuant to Article 7 and Article 23 of Regulation (EC) No 1/2003.

(7)

On 7 June 2018, the Commission adopted a Statement of Objections addressed to Philips. On 15 June 2018, Philips submitted its reply to the Statement of Objections.

(8)

The Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinion on 10 July 2018.

(9)

The Commission adopted the Decision on 24 July 2018.

2.2.   Addressees and duration

(10)

The following undertaking has infringed Article 101 TFEU by participating, during the period indicated below, in anti-competitive practices: Undertaking Duration Philips France S.A.S. 21 November 2011 – 20 November 2013

2.3.   Summary of the infringement

(11)

The local sales organisation concerned is Philips' Consumer Lifestyle business in France which was operated by Philips France S.A.S. during the infringement period.

(12)

Employees and senior management of Philips' Consumer Lifestyle business in France regularly monitored the resale prices of retailers and regularly requested and obtained the agreement of retailers to increase their resale prices. This was achieved by way of putting commercial pressure on lowest-pricing retailers and, in some cases, by taking retaliatory measures against non-compliant retailers.

(13)

Interventions were also prompted by complaints from retailers regarding their competitors' resale prices.

(14)

By closely monitoring the resale prices of its retailers and intervening with lowest-pricing retailers to get their prices increased, Philips' Consumer Lifestyle business in France sought to avoid or slow down online price ‘erosion’ across its entire (online) retail network.

2.4.   Remedies

(15)

The Decision applies the 2006 Guidelines on Fines (2).

2.4.1.   Basic amount of the fine

(16)

In setting the fines, the Commission took into account the value of sales in 2012, which is the last full business year of the participation of Philips France S.A.S. Consumer Lifestyle business in the infringement.

(17)

The Commission took into account the fact that RPM, by its very nature, restricts competition within the meaning of Article 101(1) TFEU and that vertical agreements and concerted practices such as RPM are, by their nature, often less damaging to competition than horizontal agreements. Taking account of these factors and in light of the specific circumstances of the case the proportion of the values of sales was set at 7 %.

(18)

The Commission took into account the duration of the single and continuous infringement, as mentioned above.

2.4.2.   Adjustments to the basic amount

(19)

There are no aggravating or mitigating circumstances in this case.

2.4.3.   Application of the 10 % turnover limit

(20)

The calculated fine does not exceed 10 % of Philips' worldwide turnover.

2.4.4.   Reduction of the fine in view of cooperation

(21)

The Commission concludes that, in order to reflect that Philips has effectively cooperated with the Commission beyond its legal obligation to do so, the fine that would otherwise have been imposed should, pursuant to point 37 of the Guidelines on Fines, be reduced by 40 %.

3.   CONCLUSION

(22)

In light of the above, the final amount of the fine imposed on Philips pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003 for the single and continuous infringement is EUR 29 828 000.

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(1)  OJ L 1, 4.1.2003, p. 1.

(2)  OJ C 210, 1.9.2006, p. 2.