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Internet router company: Fritz! Box manufacturer AVM has to pay a hefty fine

Internet router company: Fritz! Box manufacturer AVM has to pay a hefty fine
Internet router company: Fritz! Box manufacturer AVM has to pay a hefty fine

Fritz! boxes are present in many households, and the electronics are used to provide good Internet connections at home. The technology is not cheap. Was the pricing fair?

The Federal Cartel Office has imposed a large fine on the Fritz! Box manufacturer AVM. The Berlin-based company must pay almost 16 million euros for vertical price fixing with six electronics retailers, the Federal Cartel Office in Bonn announced. “We accuse AVM of having restricted the free setting of prices when selling its products to end consumers for years,” explained Cartel Office chief Andreas Mundt. The company had worked to restrict price competition with end consumers. “With the fines imposed, the Federal Cartel Office is sending a clear signal that violations of the ban on price fixing will not be tolerated.” The proceedings were terminated by agreement with the company – this means that AVM wants to pay and will not appeal.

The Berlin-based company had 890 employees and a turnover of 580 million euros last year, but did not disclose its profits. The German company, founded in 1986, sells routers, repeaters, telephones and smart home products such as digitally controllable heating controls and lights; the brand for this is called “Fritz!”

According to the findings of the competition authorities, AVM employees had not only discussed purchase prices with the electronics retailers, but had also coordinated the end-user prices and their increase. AVM employees had continuously monitored the end-user prices of Fritz! products in the electronics stores, using special software. According to the Federal Cartel Office, after AVM intervened, the retailers increased the end-user prices “in many cases” or promised to do so. After an anonymous tip-off and further tips from the market, the Federal Cartel Office initiated proceedings, and a search was carried out at AVM in February 2022.

Company regrets “irritation”

After the decision to impose the fine, AVM announced that it had supported brick-and-mortar retail in a rapidly changing market “so that it remains competitive with the growing online trade”. Smaller retailers had been able to purchase products at low purchase prices for their advice-intensive brick-and-mortar retail. Online sales were not planned under these conditions. “In the opinion of the Federal Cartel Office, this was not permissible in this form – it should be left to the market to decide which retailers remain and which do not,” the company said in a statement. “The management of AVM regrets if the procedure has led to irritation.” In their view, it is crucial that consumers were not disadvantaged. “The products were consistently available in stores at advantageous prices,” AVM said.

Source: Stern

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