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.40469 — Denon & Marantz (vertical restraints))

(notified under document number C(2018) 4774 final)

(Only the English text is authentic)

(2018/C 335/05)

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 D&M Holdings Inc., D&M Germany GmbH and D&M Europe BV (collectively ‘D&M’). D&M is a manufacturer in the audio/video consumer electronics and home entertainment sector. D&M Germany GmbH and D&M Europe BV are wholly-owned subsidiaries of D&M Holdings Inc. (Japan).

(2)

The Decision relates to two single and continuous infringements of Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’). In violation of Article 101 TFEU D&M Germany GmbH and D&M Europe BV implemented practices aimed at restricting the ability of retailers to determine their resale prices independently in Germany and the Netherlands respectively.

2.   CASE DESCRIPTION

2.1.   Procedure

(3)

The case against D&M originated from unannounced inspections on 10 March 2015 at the premises of an online retailer in Germany selling, inter alia, D&M’s products.

(4)

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.

(5)

Shortly after the initiation of proceedings, D&M indicated its interest to cooperate with the Commission and submitted further evidence regarding the relevant conduct.

(6)

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

(7)

On 13 June 2018, the Commission adopted a Statement of Objections addressed to D&M. On 25 June 2018, D&M 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 undertakings have infringed Article 101 TFEU by directly participating, during the periods indicated below, in anti-competitive practices: Undertaking Duration Infringment in Germany: D&M Germany GmbH 19 April 2011 – 19 January 2015 Infringment in the Netherlands: D&M Europe BV 30 May 2011 – 6 February 2014

2.3.   Summary of the infringements

(11)

During the infringement periods, D&M monitored the resale prices of retailers and requested and obtained the agreement of retailers to increase the resale prices to the desired level. This was often achieved by way of putting commercial pressure on the low-pricing retailers and, in some cases, taking retaliatory measures against non-compliant retailers, in particular by temporarily blocking accounts and ceasing to supply the relevant products.

(12)

D&M in Germany and the Netherlands pursued a strategy aimed at achieving and maintaining a stable resale price level. Employees of D&M, including its management, monitored in each of the two Member States resale prices and regularly contacted retailers to request them to increase their resale prices. Such conduct was also motivated by complaints emanating from certain retailers about resale price pressure exerted by aggressive pricing by other retailers that were not allowing them to sell D&M products at the desired higher prices and thereby achieve the profit margins they had expected. Retailers regularly agreed to the requests of D&M and adjusted their resale prices.

(13)

D&M in Germany and the Netherlands applied pressure in the form of threats and took retaliatory measures vis-a-vis retailers that undercut desired price levels.

2.4.   Remedies

(14)

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

2.4.1.   Basic amount of the fine

(15)

In setting the fines, the Commission took into account the value of sales in 2014 for Germany and in 2013 for the Netherlands, which are the last full business years of the participation of D&M in the infringements.

(16)

The Commission took into account the fact that resale price maintenance, by its very nature, restricts competition within the meaning of Article 101(1) TFEU and that vertical agreements and concerted practices such as resale price maintenance 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 is set at 7 %.

(17)

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

2.4.2.   Adjustments to the basic amount

(18)

There are no aggravating or mitigating circumstances in this case.

2.4.3.   Application of the 10 % turnover limit

(19)

None of the fines calculated exceed 10 % of D&M’s worldwide turnover.

2.4.4.   Reduction of the fine in view of cooperation

(20)

The Commission concludes that, in order to reflect that D&M 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

(21)

In light of the above, the final amount of the fine imposed on D&M pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003 for the single and continuous infringement in Germany amounts to EUR 6 327 000 and for the single and continuous infringement in the Netherlands amounts to EUR 1 392 000.

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(1)  OJ L 1, 4.1.2003, p. 1.

(2)  OJ C 210, 1.9.2006, p. 2.