01 December 1999

AOL EUROPE, jointly owned by America Online and German media giant Bertelsmann, has unveiled plans to sell PCs in Britain - a move seen by many as retaliation for the decimation of its UK market by Dixons FreeServe. This view was heightened by a fierce verbal attack on the retailer by AOL's European head, Andreas Schmidt. He indicted Dixons as a 'dominating retail force' and of 'not being very good for competition', adding that PCs in the UK cost 50% more than in most of mainland Europe. In response to the accusations, a Dixons spoke dutifully parroted the OFT report that the British PC market was competitive and offered better choice than in France and Germany. However, having led with his chin, Herr Schmidt in-tends to follow-up with the old one-two: in a deal with Fujitsu Siemens, AOL will offer PCs direct to subscribers to its CompuServe subsidiary, priced at £999 and £599 with respective cash rebates of £250 and £150.