Burti
A  A  A

Competition Council detects Prohibited Concerted Practices among Distributors of Samsung Home Appliances



On 30 October 2009 the Latvian Competition Council (CC) adopted a decision in which it found that concerted practices among five distributors of Samsung appliances infringed Article 81 of the EC Treaty (now Art. 101 of the Treaty on the Functioning of the European Union) and the Competition Law of Latvia. The total fine imposed on the five companies amounted to € 9 423 161. The CC also imposed a legal obligation on each undertaking to develop and implement corporate competition compliance programmes.

The CC found that in 2007 and 2008 Samsung Electronics Baltics Ltd. (a daughter company of Samsung Electronics Co. Ltd) and the biggest distributors of these goods in Latvia (wholesalers and retailers RD Elektroniks Ltd., ELKOR TRADE Ltd., ROTA un K Ltd. and wholesaler PROKS Ltd.) engaged in concerted practices having as their objective resale price maintenance, the allocation of markets and the restriction of free trade for Samsung goods.

The above mentioned companies fixed prices for Samsung goods and imposed fixed minimal retail prices on internet shops. Internet shops that did not obey were threatened with sanctions (for example – refusal to give access to free after sales guarantee service) or were actually sanctioned by means of refusal to supply Samsung products.

The CC also established that in the sales agreements concluded with various wholesalers in Estonia, Lithuania and Latvia (including Latvian wholesalers – parties to the case), Samsung Electronics Baltics Ltd. had included territorial trading restrictions forbidding the sale of specific appliances outside of the prescribed territory without Samsung Electronics Baltics Ltd's consent. The CC further found that the product guarantee system, which for the Samsung brand is based on the territorial principle, facilitated partitioning of markets. Indeed, although the Samsung producer itself guaranteed all its products, the after sales guarantee service was in fact only available on the territory of the distributor who had sold the respective product.

The concerted practices existed both at a vertical level between Samsung Electronics Baltics Ltd. and the wholesalers and at a horizontal level among the wholesalers (cartel).

The fines were set as follows: € 5 833 692 for Samsung Electronics Baltics Ltd. (as the initiator of the infringement), € 2 052 527 for RD Elektroniks Ltd., € 380 659 for PROKS Ltd., € 771 083 for ELKOR TRADE Ltd. and € 385 197 for ROTA un K Ltd.