Internet router company - Fritz! box manufacturer AVM must pay a hefty fine
The German Federal Cartel Office has imposed a high fine of approximately 16 million Euro on AVM, the Fritz!-Box manufacturer based in Berlin. The company is accused of limiting price competition towards end consumers over several years by colluding with six electronics retailers, as announced by the Cartel Office in Bonn. "We accuse AVM of restricting free pricing for their products towards end consumers", explained Cartel Office President Andreas Mundt. The company is alleged to have influenced the price competition over end consumers. "The German Federal Cartel Office sends a clear signal with the imposed fines that violations of the prohibition of price fixing will not be tolerated." The procedure was ended in agreement with the company - meaning AVM intends to pay and does not plan to appeal.
The Berlin-based company, with 890 employees, generated a revenue of 580 million Euro last year, but did not disclose earnings. Founded in 1986, the German firm sells routers, repeaters, telephones, and smart home products like digitally controllable heating regulators and lights under the brand "Fritz!".
According to the findings of the competition watchdog, AVM employees had not only discussed purchase prices with retailers but also coordinated on end consumer prices and their increase. AVM employees were reportedly monitoring end consumer prices of Fritz! products in electronics retail markets, with a special software allegedly being used. Following intervention from AVM, retailers reportedly raised end consumer prices or indicated they would do so to the Cartel Office. Following an anonymous tip and further market information, the Cartel Office initiated a procedure, with a search taking place at AVM in February 2022.
Company regrets "disturbances"
In response to the fine decision, AVM stated that they had supported the stationary trade in a market undergoing significant change, "so that it remains competitive against the growing online trade." Smaller retailers were able to purchase products at favorable purchase prices for their consultative stationary trade. Online sales were not intended to be offered under these conditions. "In the view of the Federal Cartel Office, this was not permissible - it should be left to the market which retailers will survive and which will not," the company statement read. "The management of AVM regrets if this conduct caused disturbances." In their opinion, it was crucial that consumers were not disadvantaged. "The products were always available at favorable prices in the trade," AVM stated.
- Andreas Mundt, the President of the Federal Cartel Office in Bonn, Germany, criticized AVM's actions towards end consumers.
- The fine imposed on AVM by the Federal Cartel Office is a significant amount, totaling approximately 16 million Euros.
- AVM, a German firm based in Berlin that sells electronics like routers and smart home products, has been accused of colluding with six electronics retailers to limit price competition towards consumers.
- The alleged price-fixing activities involving AVM and the retailers were monitored using specialized software, as reported by the Federal Cartel Office.
- In response to the fine, AVM, with over 890 employees and a revenue of 580 million Euros, expressed regret for any disturbances caused and emphasized the company's commitment to ensuring consumers have access to favorable product prices.
