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Office of Competition and Consumer Protection

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Decision of the President of UOKiK on overpricing of Yamaha musical equpiment

< previous | next > 10.11.2020

Decision of the President of UOKiK on overpricing of Yamaha musical equpiment
  • For 13 years, Yamaha Music Europe has been setting minimum prices for resale of musical equipment in online stores in Poland with its distributors.
  • President of UOKiK Tomasz Chróstny imposed a fine of half a million PLN on the company.
  • The sanction would have been much higher; however, the company cooperated with the Office as part of the leniency program and voluntarily yielded to the financial penalty.

Yamaha Music Europe is a manufacturer of musical equipment marketed under the Yamaha, Line 6 and Steinberg brands, marketed, inter alia, in Poland. President of UOKiK Tomasz Chróstny established that the entrepreneur would set minimum prices at which its products were to be sold by distributors in online stores. Since 2004, the company has been setting prices using a specific mathematical formula, and then the price list available on the Internet was the basis for determining minimum prices. Furthermore, the representatives of Yamaha Music Europe have been setting minimum selling prices for products directly to online stores.

Under the law, retailers marketing Yamaha Music Europe products should be able to freely set the prices at which they want to offer them to consumers. Due to the price collusion, consumers were overpaying for musical equipment on the Internet for 13 years. Not only did Yamaha enforce prices, but it also monitored their adoption, intervening if one of its contractors tried to sell equipment cheaper,” concludes President of UOKiK Tomasz Chróstny.

Stores may have been punished for attempting to sell at lower prices by, inter alia, losing previously granted privileges, e.g. preferential trade conditions. The sellers themselves were also watching each other's activities and informing Yamaha Music Europe if one of them was selling products cheaper.

Leniency

In the course of the proceedings, Yamaha Music Europe filed a request to waive or reduce the penalty under the leniency programme. A leniency programme is a set of regulations allowing the President of UOKiK to treat the enterprise more leniently, and in some cases, even to entirely avoid financial penalty. An exemption from financial penalty can be obtained by an entity which, for example, was first member of anti-competitive agreement to submit the relevant application to UOKiK, did not induce other undertakings to collude and presented evidence necessary to initiate proceedings or issue a decision. Yamaha could not count on being granted a full immunity from penalty, as the evidence gathered showed that the company urged its business partners to participate in the collusion. The company, however, was granted a 50 percent reduction in the penalty as it cooperated with the UOKiK and provided substantial evidence of the existence of the collusion, which proved useful in issuing the decision.

Also, the enterprise got an additional 10% reduction in the fine since it had voluntarily yielded to the penalty. Such a solution is beneficial both for the undertaking (reduced sanction) and the Office (chance to conclude the case faster).

The final penalty for Yamaha Music Europe was over half a million PLN (PLN 511,806.92). The decision is not final and may be appealed against to court. However, if the entrepreneur files an appeal, then it will lose the reduction it was granted as a result of having yielded to the penalty voluntarily. The decision was made on the basis of Polish and EU regulations, as the practice had an impact on trade between EU member states.

The practices of musical instrument manufacturers, including Yamaha Music Europe, are also under the scrutiny of antitrust authorities in other countries. In 2020, the antitrust authorities in Austria and the United Kingdom also issued decisions on the illegal setting of resale prices for musical equipment.

This is not the first decision of the President of UOKiK concerning the musical instrument market. In December 2011, UOKiK found that Roland Polska agreed with distributors on the minimum resale prices of its products on the Internet.  The undertaking was imposed with a fine exceeding PLN 216,000. The decision was confirmed by the courts of subsequent instances.

Entrepreneurs and managers interested in the leniency program are invited to contact the office by calling at 22 55 60 555, where UOKiK lawyers will answer all of questions, also anonymous ones, related to leniency applications.

The Office runs a program of acquiring information from anonymous whistle-blowers. Visit https://konkurencja.uokik.gov.pl/sygnalista/ and fill out a simple form. The system we use guarantees full anonymity, also towards the office itself.

President of the Office would also like to remind the public that anyone who has suffered loss as a result of a breach of competition law may file a civil lawsuit against any of the entities that have broken the law. For example, consumers who have purchased musical equipment online and have suffered damage as a result of Yamaha Music Europe's illegal practices, may claim some of their money back in court.

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL

Attached files

 

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