On 1st November, the Interactive Media in Retail Group (IMRG)
announced that it had raised the issue with the OFT on behalf
of the UK's internet industry. It did not name Sony, nor any
other company; instead, it said "a major electrical consumer goods
manufacturer" was depriving internet shoppers of competitive prices
and warned that internet traders are threatened because the scheme
forces them to pay "significantly more" for its TVs and other goods
if they sell them online.
The e-commerce industry body issued an ultimatum: it would name
and shame the brand at noon on 7th November unless it changed its
ways. IMRG CEO James Roper explained his thinking to OUT-LAW: he
knew that if they approached the company
directly it would ignore a polite letter; and approaching
the courts could take years. But he had hoped that the
manufacturer would engage with IMRG in response to the
ultimatum, rather than risk bad publicity. "You've got a major
consumer brand positioning itself as anti-consumer, anti-internet
and anti-competitive," said Roper. "How smart is that?"
The deadline passed and there was no response, but still IMRG
did not name names. It was a journalist who worked it out, possibly
by comparing online and off-line prices. Sony's identity was
revealed in The Times yesterday.
Sony is not alone. According to The Times, Sharp and Panasonic
have admitted that they have similar pricing strategies. Their
defence appears to be that they offer goods at a set wholesale
price but provide discounts to retailers who offer added value –
such as displaying the products in a store or demonstrating how to
use them. They consider this lawful.
IMRG believes the schemes are anti-competitive, pointing out
that the price difference can be as much as 10%–15%. It says that
some of its members are at risk of going out of business unless the
pricing plan changes.
According to reports, the European Commission and the Trading
Standards Authority have also received complaints about the
strategy. The OFT confirmed that it has received IMRG's
letter but has not yet decided whether or not to launch a
formal investigation.
Editor's Note: The original version of this
story implied that IMRG had named Sony in its letter to
the OFT, this was not the case. IMRG
has subsequently been in touch with OUT-LAW to clarify the
position and the story has been updated.
