Germany’s Federal Cartel Office closes two investigations into dual pricing practices

by Gabriele Accardo

On 28 October 2013, Germany’s Federal Cartel Office (“FCO”) stated that it has closed its investigation into Gardena’s dual pricing practices, which, according to the FCO, sought to limit online distribution of its gardening products.

The investigation was prompted by online distributors of Gardena products, based on the claim that Gardena’s discount system favored traditional retailers since Gardena only granted full discounts to them.

As a result of the investigation, Gardena has scrapped its dual pricing system and decided to grant the same level of discounts to both brick-and-mortar and online retailers.

On the other hand, on 23 December 2013, the FCO stated (and here) that it has closed the investigation into a similar discount system put in place at the beginning of 2013 by Bosch Siemens Hausgeräte GmbH, since the household appliances manufacturer intends to discontinue such a rebate system and grant the same rebates to all its retailers.

Under the rebate system, hybrid dealers, i.e. those who sold household appliances both in a brick-and-mortar shop and via a webshop, received a smaller discount in case they generated a higher turnover online. The FCO received numerous complaints from hybrid dealers who were in fact put a disadvantage vis-à-vis traditional retailers.

Andreas Mundt, President of the FCO stated that “…if the granting of turnover-based purchase rebates restricts dealers in their choice of a sales channel, this is unacceptable. The rebate system created incentives for dealers to limit their online sales. As a result, competition through online sales was reduced.”