German Competition Authority : Bundeskartellamt imposes fines on account of vertical price fixing in the sale of furniture

Date of issue:12.01.2017

The Bundeskartellamthas concluded its cartel proceedings against furniture manufacturers for enforcing resale price maintenance on retailers. Fines totalling 4.43 million euros were imposed on the five manufacturers aeris GmbH, hülsta-werke Hüls GmbH & Co. KG, Kettler GmbH, Rolf Benz AG & Co. KGand Zebra Nord GmbHas well as on four managers involved.

Andreas Mundt, President of the Bundeskartellamt: 'Manufacturers may only make non-binding price recommendations to retailers and not oblige them to comply with set resale prices. If competition between retailers is restricted, it is the customer who suffers. The Bundeskartellamt has already imposed fines for anti-consumer pricing practices in several proceedings recently, e.g. in the food retail sector and in the sale of mattresses and navigation devices. The present case concerns yet another product area which is of importance to consumers. The brand manufacturers concerned cover the entire product range from free-standing and upholstered furniture and office chairs through to garden and leisure furniture.'

The proceedings were initiated due to complaints by retailers. In June 2014 and July 2015 the authority carried out dawn raids at the premises of the manufacturers. With its decisions the Bundeskartellamthas addressed particularly clear-cut cases of vertical price fixing. The manufacturers had applied inadmissible pressure on lower-price retailers in order to influence shop prices, in particular by threatening to refuse to supply to them and in some cases by carrying out those threats. To some degree competing retailers had also helped to monitor compliance with the minimum sales prices set by reporting to the manufacturers those retailers that had deviated from the set price and asking the manufacturers to ensure that the price level was maintained. The Bundeskartellamtdecided not to impose fines on these retailers for discretionary reasons.

The individual fines differ considerably depending on the gravity of the infringements and the large difference in size of the companies. As all the companies involved cooperated with the Bundeskartellamt, the authority was able to conclude all the proceedings by way of settlement. Apart from a 10% reduction in fine resulting from the settlement, the very limited financial resources of some of the companies, due to ongoing reorganisation and restructuring measures, served as a mitigating factor in the calculation of the fines.

Most of the decisions imposing the fines are already final. The time limit for appeal has not yet expired in the case of one of the fines. This can still be appealed to the DüsseldorfHigher Regional Court.

More information on the proceedings is available in a case summary (German) on the website of the Bundeskartellamt.

Press release (pdf)