Sony accused of price-fixing in the UK

by Ross Miller { Nov 15th 2005 at 6:00PM }

Sony is causing innovation - but not just in ways that benefit the consumer. In Europe, online retailers have accused Sony of giving discount prices to "brick-and-mortar" stores, undercutting the profit margin of the web shops and forcing them to charge more for their PlayStations (and other Sony products, mind you). Some online retailers have filed a complaint with the Office of Fair Trading (OFT) against Sony's dual-price practices.

Sony's reply? Guilty as charged - according to a press statement, Sony "provides discounts for resellers that invest in building the Sony brand." In other words, if you push Sony products, you will be rewarded.

Whether or not this is legal remains to be seen - Sony says it is, the EU Commission thinks otherwise. We will watch how this plays out (as this will effect all parts of industry), but in the meantime, how do you feel about Sony giving incentives to stores who effectively advertise their product? Is this unfair practice?

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Reader Comments (Page 1 of 1)

daver @ Dec 18th 2005 10:09PM

Sony is really in the mire these past two weeks. Can it get anyworse for them ? Really ?

bd (formerly b) @ Dec 18th 2005 10:09PM

It's called publicity. Microsoft is doing the same with TV channels. Get over it.

Sense @ Dec 18th 2005 10:09PM

This is nothing new. Sony did something similar with the PS1. Basically they told Circuit City if it carried other game consoles then Sony would pull its other products from the shelves.

Adam @ Dec 18th 2005 10:09PM

Needs more ��, its UK not USA.

JRM @ Dec 18th 2005 10:09PM

that's like a really sneaky form of bribery: "advertise me and i'll make a sweeter deal for you"

Lesbian Ham @ Dec 18th 2005 10:09PM

Come to think of it, I reckon I would've done the same. I mean, they have a point...

But, I'm with the 360 this generation :-)

Nmaster @ Dec 18th 2005 10:09PM

Love or hate their games, those guys just make one giant asshole of a company...

elmer @ Dec 18th 2005 10:09PM

It doesn't take much to imagine that they might also give discounts to those stores that DON'T push their competitions' brands, and that my friends would be especially nefarious

Evan @ Dec 18th 2005 10:09PM

thats kinda lame if i was those stores id go on a boycott and advertise the 360 just to piss them off.

joss @ Dec 18th 2005 10:09PM

find it incredibly cheap to try make us pay more just because the product we decide to purchase is done so online. Alright fair enough, actual shops have you pay more because they have extra overheads to take into account before they make a profit, but for Sony to say, well we want you to pay more....just because we want more money is a complete insult to the consumer. Justified by their's or anyone elses excuses or not.

A website discount is something that is completely deserved by companies who have online shops because they don't have to pay for the overheads like a brick and mortar shop in orderto make a profit.

Very cheap imo

Obvious @ Dec 18th 2005 10:09PM

Eh, sounds like what any company would do to level the playing field for brick-and-mortar shops, as well as turn a healthy profit from online retailers. Don't get me wrong, I prefer to spend less on my purchases, but I would hardly blame Sony of any foul practice. As for the whine of online retailers affected by this, I would say one thing: stop pushing a bunch of unavoidable pop-ups and banner ads, and maybe people like me would feel sorrier for your loss in a case like this. In the meantime, you make back your losses on the advertisments you post from other organizations... so stop whining.

As for Sony being a "giant asshole of a company", shurely you gest: MS has a hell of a lot shadier business practices than Sony.

gt @ Dec 18th 2005 10:09PM

People this is nothing new. Companies always give discounts to retailers that buy more product. Walmart and target do this stuff everyday. Companies even pay to have their items on particular shelves in stores. No big deal at least not in the US. Now if UK has differnt laws that's another story, but still no big deal. This helps the consumer, not hurt.

Johnny Kielbasa @ Dec 18th 2005 10:09PM

12. I agree. The complaint is rubbish. Companies do this all the time. They offer discounts for all sorts of reasons.

Sony is, if anything, more reasonable. Offering a discount for services rendered is way better than your example of Wal-Mart. They demand a discount. And it's not just Wal-Mart. My old Mum gets a discount for being older than dirt. Old?!

Here, Sony pays a discount so we can preview and play games in traditional stores, a marketing advantage. It is a reasonable argument

And if a blind person can buy on-line, they can buy at most 'brick and motor' stores. That was was a bad play at sympathy.

Nick Coffin @ Dec 18th 2005 10:09PM

I don't even get how this is news really. I know this happens in US all the time. I'm surprised there isn't some kind of ordinance in place to make it so brick-and-mortar always get cheaper prices if the store opts to push the brand in question.

Just sounds like someone is trying to make Sony look bad for something just about every big company does.

Johnny Kielbasa @ Dec 18th 2005 10:09PM

Josh @ Dec 18th 2005 10:09PM

Sony aint doing anything wrong. I bet you Microsoft is paying these people to sue sony.

Mephy @ Dec 18th 2005 10:09PM

The difference here is that consumers are taking the brunt of it.
Nintendo and Microsoft likely do the same, but why don't you see a price differential on their products when they're online? You don't, you say?

That's the point. Business is business, I agree, but when it penalizes me as a consumer by having to pay more because I decide to shop online, that's where a line needs to be drawn.

Justin @ Dec 18th 2005 10:09PM

In fact what has actually happened is that sony has been accused of price-fixing in an attempt to curb internet bargains and send online prices soaring. Its nothing to do with buying in bulk or pushing the sony brand. The fact that the UK gets charged alot more for pracically everything means this sort of thing is bound to piss people off.

If they get away with this then other manufacturers are bound to follow suit. Makes me sick.

Dean @ Dec 18th 2005 10:09PM

Is it just me or is Sony one of the dirtiest companies to come out of Japan? They always seem to be up to somethin shady. Whether it be overhyping, price fixin, stealin ideas or just plain lyin through their teeth, they really dont want to be trusted.

Jack @ Dec 18th 2005 10:09PM

"Now if UK has differnt laws that's another story, but still no big deal. This helps the consumer, not hurt."
The European Union commision say sony has violated trading laws, which UK is part of.

ZeSonyNotSoSmart @ Dec 18th 2005 10:09PM

Wow, Sony has massive balls.

Piss off the retailers responsible for selling your product. I'm sure they're all gonna be quick to line up when Sony has another major game product to sell.

S Jimmy @ Dec 18th 2005 10:09PM

I am an independant retailer working in a high st shop. I know how much we pay for all the products we sell and how much margin we make. On most products nowadays we are lucky to make 25% margin. On very expensive products that comes down to about 18%. within those margins we have to pay for the trained knowledgable staff, the high business rates and the cost of running a service/repair department. The large brand name companies need places like our shop to give customers(who need it)the time, information and help they need to choose the right product and provide the backup service when needed. The on-line shops sell the same products at maybe 10-15% because their running costs are much much lower and are probably making a higher profit in many cases. This means that shops like us will either slowly go out of business or join the price chasing e-tailers. When this happens the everyday customer will have nowhere to turn for aftersales help, pre-purchase viewing, local friendly service or repairs. When that happens it will be a very sad day for all consumers in the uk. Even more so when the e-tailes start to add extras into the price for service we have always tried to give at the normal prices we charge.
Can someone also explain to me why furniture shops are able to sell products at massive margin. Then offer 75% off sales while still making profit. Then expect you to wait for months on end for the new sofa you have paid for. Yet my industry still gets labelled as a rip off/poor service/greedy?

Scott @ Dec 18th 2005 10:09PM

Get Over It

Every Single Major Corporation does EXACTLY the same thing. Johnson and Johnson, Sony, Microsoft, what have you. The Rootkit issue is probably the only reason why this is making any kind of splash. This is just the way that you do business as a large corporation. Nothing more, Nothing less