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Panasonic Agrees to Repay Consumers in Price-Fix Scheme

January 19, 1989

NEW YORK (AP) _ Up to 665,000 Panasonic customers victimized by a nationwide price-fixing scheme are due as much as $16 million in refunds from the Japanese consumer electronics giant, officials said.

The settlement Panasonic agreed to Wednesday could be extended to every state except Hawaii, New York State Attorney General Robert Abrams told a news conference.

Abrams said Panasonic cheated customers by illegally pressuring thousands of retailers, including such major chains as K mart and Montgomery Ward, to charge list price.

″There was an elaborate nationwide policing scheme whereby certain retailers acted as stool pigeons, as rats, and they would report that somebody down the street is charging less,″ said Lloyd Constantine, chief of the attorney general’s antitrust bureau.

Abrams said other electronics manufacturers were being investigated, but declined to identify them or say whether there would be any charges.

The settlement, in which Panasonic denied wrongdoing, was filed in U.S. District Court.

″We voluntarily resolved the matter in the belief that a quick settlement would help avoid protracted and costly litigation and disruption to our dealers and our business,″ said Ralph Wolfe, vice president of Panasonic, a division of Matsushita Electric Corp. of America with headquarters in Secaucus, N.J.

Abrams said the scheme involved 16 products sold under the Panasonic and Technics labels, including videocassette recorders, video cameras, cordless phones, answering machines and stereo equipment.

Panasonic agreed in the settlement to make refunds of at least $8.5 million and up to $16 million to customers nationwide who purchased its products between March 1 and Aug. 31 of last year.

Panasonic prices were 5 percent to 10 percent higher on average because of the scheme, Abrams said.

″In a few short months over $15 million was extorted from consumers in the form of higher prices,″ he said.

Abrams said Panasonic began fixing prices in March, but stopped after six months when it learned of his investigation. The company had planned to extend the scheme to include all its products, he said.

Panasonic coerced retailers into charging full list prices by threatening to stop supplying stores that sold its products for less than the suggested price, he said.

The attorney general could not say how many retailers participated, but said ″more retailers went along than opposed it.″

Abrams’ office learned of the scheme when an unidentified major retailer that does business in New York ″bitterly complained″ it was being pressured by Panasonic to strictly comply with price guidelines, he said.

Under the agreement, the retailers are not liable for any damages.

Consumers who bought any of the products during the six-month period and sent in warranty cards will be notified they are eligible for a refund. Panasonic also agreed to publish newspaper advertisements on obtaining refunds, Abrams said.

Refunds on the overcharges will range from $45 for video cameras to $17 for a cordless telephone.

Under the agreement, attorneys general in all states except Hawaii, where retailers deal with Asian-based Panasonic subsidiaries, will have the option of adopting the settlement in their state, Abrams said. Illinois and Maryland already have.

If attorneys general representing at least 80 percent of Panasonic consumers nationwide fail to adopt the agreement within 60 days either party can terminate the settlement.

If that happens, Abrams said, New York would sue Panasonic.

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