MILLIONS of internet shoppers face a â€œrip-offâ€ Christmas after a decision by leading electronics companies to force up online prices for DVD players, hi-fis and similar products to high street levels.
Manufacturers, including Sony, are charging shopping websites wholesale prices between 10 and 15 per cent higher than their prices to high street stores, the trade group that represents online sellers says.
The rises mean that e-retailers will find it difficult to carry on undercutting prices in the high street. Manufacturers prefer traditional retail outlets because it allows them to â€œshowcaseâ€ their goods.
Sony denies penalising internet shopping sites, arguing that it is rewarding stores that can demonstrate its products.
Internet traders will meet today to decide whether to â€œname and shameâ€ the companies involved, which include the leading household names in home entertainment goods.
The Office of Fair Trading and the European Commission have already been asked to look into the pricing policies of Sony, the Japanese giant.
The Times has learnt that the practice of charging different prices to internet retailers and high street stockists â€” known as dual pricing â€” was started by Sony and has been followed by other manufacturers.
The managing director of one website said that the electronics firms were too big for many of the independent website traders to argue with.
He said: â€œIf you are seen to be a troublemaker it can have a detrimental effect on supplies. If they want to, they can just put you out of business.
â€œWe are struggling to stay in business and some companies have already gone to the wall.â€
Sales of electronic goods on the internet have risen to 20 per cent of the total market over the past five years and total online shopping is expected to amount to Â£5 billion, or 9 per cent of all retail sales, this Christmas.
But the big retail names still have the largest share of the market and are understood to have exerted pressure on the manufacturers to offer them a better deal at a time of falling high street sales. Sony and the other manufacturers also have an interest in protecting the exclusive outlets that carry their brand names. There are around 100 Sony Centres in the UK which are independently owned but sell only Sony products.
James Roper, of the Independent Media in Retail Group (IMRG), the e-retailers industry body, predicted that the electronics firms would face a backlash from millions of internet shoppers.
â€œFor the major brand which has instigated this policy, this appears to be an extremely risky step which will upset a lot of consumers,â€ said Mr Roper.
â€œI think they will get themselves into a horrible mess. We have researched this issue across 24 countries in Europe and there is no evidence of it happening anywhere else. Rip-off Britain is being treated to yet another world first.
â€œThis is a serious abuse by a global brand of both its position and consumersâ€™ rights, and must be stopped immediately.â€
Sony said its policy was not aimed at pushing up prices but at offering incentives to retailers that trained staff to demonstrate to shoppers the functions of complicated products.
Bill Vestey, the companyâ€™s UK spokesman, said: â€œSony offers a common basic selling price to all resellers. This price is then affected by different types of discounts.
â€œSony has a discount scheme that provides discounts for resellers that invest in building the brand and marketing our products in a way that provides the consumer with confidence in the Sony productsâ€™ quality features and support. â€œFor example, these discounts incentivise resellers that have staff that can demonstrate our products, have dedicated Sony sales areas and concentrate on our most cutting-edge, innovative products.
â€œThis type of incentive for services provided by resellers is lawful under EU and UK law.â€ A spokeswoman for the National Consumer Council said: â€œInternet-only retailers may be capitalising on the fact that consumers believe that goods are cheaper on the internet.
â€œWhat this move shows is that consumers will have to be very alert and shop around before they buy.â€
An industry insider said: â€œPrice comparisons are hard to draw now because a lot of internet retailers are simply delisisting these products rather than pass on the price increase to the customer. Theyâ€™re having to do that because the electronics companies are charging them up to 15 per cent more than theyâ€™re charging the competition on the High Street.â€
The Royal National Institute for the Blind said that the move would hit blind and partially sighted people who found the high street a difficult environment.
A spokesman for the OFT confirmed that a complaint about dual pricing had been received and was being considered. But he said that a formal investigation had not yet begun.
Sony is doing its best to anger people, where have their PR departement gone? Do they have a new CEO? Do he/they come from Mars (as we all know, there is a portal to hell on Mars)
First, rootkits, then, denial of rootkits, and a whole lot of rootkit-related stuff. Then they take back their promised SWG-refund, and now this. All in the space of weeks. Good job on destroying your brand Sony.
Found a nice quote
For me that says it all, who writes these EULA and who in there right would use goods that have no warranties.
If it is sony then i for one have decided to make a stand by not buying any more of there products.
I know one voice wont make much difference but its time someone made a stand …
As far as i am concerened they can stick there drm\rootkits and there products where the sun dont shine…