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.
