Garmin Investigated For Price Fixing, Offices Searched

In June, the President of Poland’s Office of Competition and Consumer Protection (UOKiK), Tomasz Chróstny, initiated an investigation into potential anti-competitive practices involving Garmin Polska, a wholly owned subsidiary of ownership of Garmin Nederland.

The investigation aims to determine whether Garmin Polska has engaged in price-fixing with its product distribution channels.

Market pricing indicators suggested that Garmin Polska might have agreed with distributors to set prices for smartwatches and other devices. UOKiK’s analysis indicated that Garmin products were sold at nearly identical prices across numerous online stores, raising concerns about possible collusion to restrict competition.

With the help of Polish Police, UOKiK conducted searches at the offices of Garmin Polska and three other companies as confirmed by President Chróstny:

Our analysis showed that the reports of collusion could be plausible. Therefore, I initiated a preliminary investigation and ordered searches, which were conducted with police assistance at the headquarters of Garmin Polska and three other businesses. The potential restriction of competition could also affect consumers by depriving them of the opportunity to purchase cheaper products.

Or, in original Polish:

Nasza analiza pokazała, że sygnały o zmowie mogą być prawdopodobne. Dlatego wszcząłem postępowanie wyjaśniające i zleciłem przeszukanie, które odbyło się w asyście Policji w siedzibie Garmin Polska i trzech innych przedsiębiorców. Możliwe ograniczenie konkurencji miałoby również wpływ na konsumentów i mogło pozbawić ich możliwości zakupu tańszych produktów

The issue has been investigated since June 2024 and a determination is expected ‘soon’ to see if any of the companies involved or their directors will face charges. Companies found guilty of participating in anti-competitive agreements could face fines of up to 10% of their turnover, while managers responsible for such practices could be fined up to 2 million PLN.

Often in these kinds of cases, companies and managers involved in illegal agreements have access to leniency programs. For example, UOKiK can be contacted directly via a dedicated phone line (22 55 60 555).

Guilty?

I have heard through sources that Garmin has entered into an agreement on this matter with the authorities. But I don’t have certainty on this information. I have asked Garmin for comment before publishing further on the outcome.

General Information

Price fixing laws differ by region but it is illegal in the EU (Article 101 Treaty violation), the UK (Competition Act 1998, Enterprise Act 2002) and the USA (Sherman Act) where it is more nuanced towards the prevention of collusion.

Looking at companies other than Garmin, it often seems to me that Manufacturer Suggested retail Prices or recommended Retail Prices are adhered to by very many retailers selling the same products, at least when they are initially launched. It’s not illegal to set an MSRP/RRP, it’s just suspicious if very many retailers stick to it as some might think that either the retailers agree to do so amongst themselves or the supplier might have threatened to withhold stock from retailers who don’t stick to the desired price levels.

Within weeks we will see a Garmin Fenix 8 which will almost certainly be in high demand. Production and supply will be limited and to me, it would seem perfectly natural that we can only buy them at MSRP/RRP. However, 3 months later you would have thought that production would have caught up with demand. Let’s see what happens.

Source: UOKiK