Online prices 'hiked up'Companies accused of raising web prices

16 November 2005

Leading electronics companies have been accused of giving shoppers a raw deal by forcing up the cost of online goods.

Internet traders complain that manufacturers are charging them 10 to 15 per cent more than they charge high street stores for TVs, DVD players and other electrical products.

Online sales of electronic goods now account for 20 per cent of the market and shoppers are expected to spend GBP 5 billion online this Christmas.

A recent report by Which? (see 'Related links', below) found shoppers could save more than a quarter of the high street price by shopping online. We managed to save more than GBP 1,800 by buying online.

But members of the Interactive Media in Retail Group (IMRG) say the dual pricing operated by some electronics companies is making it difficult for websites to continue to undercut high street prices. So far, the IMRG has not named the brands it is accusing.

Online traders forced out of business

James Roper, of the IMRG, said some online traders were being forced out of business.

'This serious abuse by a global brand of both its position and consumers' rights must be stopped immediately.

'Twenty-four million British consumers have embraced internet shopping. They are collectively investing GBP 6 billion a year in PCs and internet connections… These consumers are directly bearing many of the costs previously carried by bricks-and-mortar shops, which is a major reason for internet shopping prices being highly competitive, so it is completely inappropriate to disadvantage them through dual pricing.'

The IMRG has now complained to the Office of Fair Trading (OFT). Mr Roper said research from 24 European countries suggests dual pricing is happening only in Britain.

The OFT confirmed it had received a complaint about retail pricing practices but would not confirm 'any names or whether we are examining a complaint in relation to more than one manufacturer'.

Electronics giant Sony said it offered a 'common basic trade price' to both high street and online stores. But it admitted this price could be lowered by a series of discounts it offered high street stores for pushing its brand through dedicated Sony areas with specialised staff.

It added: 'Neither the OFT nor the European Commission have been in touch with us. We are confident that our commercial conditions are legal and are in the best interest of consumers.'