Clifford Chance

On 2 July 2024, the German Federal Cartel Office ("German FCO") announced that it has imposed fines totalling nearly EUR16 million on AVM Computersysteme Vertriebs GmbH ("AVM") for vertical price fixing with six electronics retailers.

AVM is a German manufacturer of telecommunication and network technology products, which in particular distributes routers and repeaters but also telephones and smart home products under the brand "FRITZ!".

The investigation against AVM was carried out on the basis of an anonymous tip-off to the German FCO's whistleblowing system and further tip-offs from market participants leading to a dawn raid in February 2022.

According to the German FCO's announcement, the practices of AVM went clearly beyond recommended resale prices which are generally not considered to be restrictive. Specifically, the German FCO accused AVM of having restricted the ability of electronics retailers to set prices for AVM products and coordinating increases of end customer prices aiming to restrict price competition at the expense of end customers.

In particular, the German FCO found that AVM employees in some cases also demanded certain minimum sales prices ("target prices") ranging between the recommended retail price and the retailers' purchase price. Further, the German FCO concluded that AVM employees continuously monitored the retailers' end customer prices using in-store research and online price comparison services as well as specialised software.

The German FCO found that AVM's practices led to price coordination to a varying extent, especially when end consumer prices were considerably below the “target prices” or after retailers had complained about inadequate end consumer prices. In many cases, following AVM’s objections, the retailers agreed to raise their end consumer prices or adjusted their prices upwards.

In setting the fine, the German FCO took into account that a settlement could be reached with AVM. The orders imposing the fines are final. According to the German FCO's announcement, no fines were imposed on the electronics retailers involved.

In conclusion, resale price maintenance is clearly in the focus of the German FCO. The AVM case is already the second antitrust fine of the German FCO for vertical price fixing in 2024 after it announced that it had fined Pfanner, manufacturer of protective clothing, earlier this year in March 2024. This might not be the last one.