The European Economic Community, in a dramatic antitrust crackdown, has decided to seek nearly $10 million in fines against a major Japanese hi-fi manufacturer for allegedly restricting competition, Common Market sources said today.
It is easily the heaviest financial penalty ever inflicted by Europe's antitrust authorities on a single company and indicates a much tougher stand by Common Market trustbusters against firms which don't play by the EEC rule-book, according to informed sources contacted here.
The spectacular EEC decision is against Pioneer Electronics Europe of Antwerp Belgium, the EEC subisidary of Pioneer Electronics Corp. of Tokyo, one of the largest manufacturers of electronic goods in the world, and a company whose products are household words in the European hi-fi market.
The main EEC complaint is that Pioneer, in a secret meeting held in Antwerp in January 1976 with officials from its exclusive dealers in the United Kingdom, Germany and France, devised a market-rigging scheme whereby its French distributor was subsequently protected from imports of competitive pioneer equipment from Germany and Britain.
This arrangement, whereby so-called "parallel imports" are stopped from crossing national boundaries within the EEC, threatens the unity of Europe's Common Market, and at the same time jeopardizes the right of consumers throughout Europe to benefit from free competition, argue EEC officials in support of their decision.
The EEC's move against the Japanese hi-fi giant, one of some 20 companies in the electronic goods sector into which the EEC's executive commission opened investigation last July, is considered here to be just the start of a widespread trustbusting offensive against concerted practices in the consumer electronic market. Concerted practices are outlawed by EEC rules on competition, in particular by article 85, of the Common Market treaty.
Expectations of generalized crackdown by the EEC against companies contravening common market rules, including those in industries other than electronics, are buttressed by the new-found determination of European antitrust officials to impose massive deterrent penalties, going up to 5 percent of annual turnover, against firms deliberately flouting clearly established European antitrust jurisprudence.
The decision to upgrade fines for anti-competitive behavior was taken at a closed-door meeting of leading officials from the nine EEC member governments, held here Oct. 30.
In the specific case of pioneer and its distributors, the fines in fact range from 2.5 percent to 4 percent of sales, reflecting the EEC's admission that the precise duration of the company's infringements was difficult to prove. The central fine on Pioneer Europe is approximately $6 million. That for its German distributor C. Melchers and Co. (Bremen) is set at $2.8 million, for its French dealer Musique Diffusion Francaise $1 million and $400,000 for Pioneer Hi-Fi (UK).