Brussels, 07/12/2000 (Agence Europe) - The European Commission has decided to start formal proceedings against B&W Loudspeakers, the second most important supplier of top-quality loudspeakers after Bang & Olufsen. In its statement of objections, the Commission warns B&W that its distribution system comprises restrictions on retail prices and on cross supplies to and between authorised distributors, thus hindering the development of modern distribution methods such as e-commerce.
In January 2000, B&W had notified selective distribution arrangements for the whole of the European Union Member States plus Norway, requesting clearance under EU competition rules. After a detailed investigation, the Commission came to the preliminary conclusion that such agreements could not benefit from such an exemption with respect to the general rules applying to distribution agreements. The B&W distribution system, it states, comprises several competition restrictions, namely the application of minimum retail prices and margins, a prohibition on cross supplies to wholesalers which partitions the EU's Internal Market and a prohibition on distant sales including through the Internet. According to Community legislation in this connection, companies whose market share is below 30% may agree supply and distribution arrangements best suited to their individual commercial needs. Although B&W effectively meets such criteria (it holds less than 30% of the top quality loudspeaker market in the EU plus Norway), it applies restrictions that mean infringement of one express condition for obtaining the exemption. B&W have two months in which to submit its defence in writing. Having notified its distribution system, B&W will not, however, receive a fine pending the final decision.