Samsung and Philips raided in Europe anti-competition investigation

Chris Davies - Dec 6, 2013, 2:49pm CST
Samsung and Philips raided in Europe anti-competition investigation

Samsung and Philips have confirmed that they are under investigation by the European Commission about potential anticompetitive behaviors, after EU inspectors raided a number of companies earlier this week. The EC did not name the targeted companies; however, both firms revealed to the BBC that they were co-operating with investigators around concerns that they have forced higher prices by restricting availability of certain consumer electronics and small appliances in Europe.

“The Commission has concerns that the companies concerned may have violated EU antitrust rules that prohibit anticompetitive agreements or concerted practices” the EC said in a statement. “The Commission has grounds to suspect that the companies subject to the inspections may have put in place restrictions on online sales of consumer electronic products and small domestic appliances.”

Although the Commission is keen to point out that being raided isn’t necessarily a sign of presumed guilt, the potential penalties should Samsung, Philips, or other firms involved be found guilty are significant.

“These restrictions, if proven, may lead to higher consumer prices or the unavailability of products through certain online sales channels” the EC points out. As a result, it has the right to impose fines of as much as 10-percent of global annual turnover.

Were the maximum penalty applied to Samsung – something highly unlikely – that could mean a fine in the region of billions of dollars.

Exactly which products are proving contentious is unknown, the practice of limiting availability of particular models to different countries or even specific retailers is not especially unusual. What would incur EC wrath, however, would be if that exclusivity was also used to artificially buoy pricing to the point that it was deemed anticompetitive for consumers.

It’s not the only anti-competition issues Samsung is facing in Europe at the moment. The company is under investigation for alleged antitrust behaviors around patent licensing, after Apple complained that it was refusing to agree to fair terms for vital 3G standards. Back in October, Samsung offered a portfolio of concessions to the EC in the hopes of escaping a fine over the issue.

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