Bundeskartellamt imposes fine against «Fritz!» manufacturer AVM

Bonn / DE. (bund) Germany’s Bundeskartellamt (Federal Cartel Office) has imposed fines totalling nearly 16 million euros on AVM Computersysteme Vertriebs GmbH and one staff responsible at AVM on account of vertical price fixing with six electronics retailers. The company is manufacturing telecommunications and network technology products. Under the «Fritz!» brand it distributes, in particular, routers and repeaters, but also telephones and smart home products. Based in Berlin, AVM describes itself as one of Germany’s and Europe’s leading manufacturers of products for broadband connections and the digital home.

The proceeding was triggered by an anonymous tip-off to the Bundeskartellamt’s whistleblowing system (BKMS) and further tip-offs from market participants leading to a dawn raid in February 2022.

Bundeskartellamt President Andreas Mundt: «We accuse AVM of having hampered the free formation of prices in the distribution of its products to end consumers. AVM has coordinated increases of end consumer prices with electronics retailers, aiming for restricted price competition at the expense of end consumers. With the fines imposed, the Bundeskartellamt is sending a clear signal that violations of the prohibition of resale price maintenance will not be tolerated.»

In addition to conducting the usual negotiations on purchase prices, AVM employees also coordinated end consumer prices with the electronics retailers involved. The price coordination generally aimed at price increases; in some cases AVM employees also demanded certain minimum sales prices («target prices») ranging between the recommended retail price and the retailers’ purchase price. AVM employees continuously monitored the retailers’ end consumer prices using in-store research and online price comparison services as well as, as of mid-2019 at the latest, a specialised software. Prices were coordinated, 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 Bundeskartellamt took into account that a settlement could be reached. The orders imposing the fines are final. No fines were imposed on the retailers involved. A case summary in accordance with Section 53(5) of the German Competition Act (GWB) will be published soon.