Caught in a Tangle: Sennheiser Slapped with a Hefty Fine for Price-Fixing Scandal
Unlawful Pricing Agreement Penalty: Sennheiser Faced with Hefty Million-Dollar Fine from Cartel Office - Committee Kicks Off Process to Pass Legislation Standardizing Equal Treatment of Men and Women for Consumer Protection in Member States
Audio powerhouse Sennheiser found itself in hot water after the German Federal Cartel Office (Bundeskartellamt) accused the company of restricting free price formation in the distribution of premium headphones since at least 2015, according to President Andreas Mundt.
Sennheiser allegedly negotiated consumer prices with retailers, particularly when prices fell significantly below the recommended retail price (RRP) or when retailers voiced their concerns about low prices. Sennheiser even trained its employees on cartel law, but these teachings were used to hide the price-fixing actions, Mundt revealed.
Not only did Sennheiser face penalties, but the authorities' decision also affected Sonova, a Swiss hearing aid manufacturer. Sonova acquired the consumer electronics division of Sennheiser in 2022, including the sale of headphones to consumers. This illegal agreement continued between March and September 2022, until the authorities intervened with a raid.
- Sennheiser electronic
- Price-fixing scheme
- Federal Cartel Office
- Headphones
- Major fines
- Bundeskartellamt
- Andreas Mundt
After a thorough investigation, the Bundeskartellamt imposed a hefty fine of almost €6 million on Sennheiser electronic SE & Co. KG, Sonova Consumer Hearing Sales Germany GmbH, and three individual employees involved in the scheme. The fines were a stern warning, taking into account both the gravity of the violations and the cooperation demonstrated by Sennheiser and Sonova during the investigation. Interestingly, the retailers were excluded from the fines in the settlement.
Under the leadership of Andreas Mundt, the Bundeskartelamt gets involved in antitrust investigations, such as this price-fixing case, putting an end to such anti-competitive practices. Though Mundt's direct involvement in this matter is not detailed, as the head of the Federal Cartel Office, he works diligently to eradicate anti-competitive practices.
Key Takeaways:
- Duration of allegations: From at least 2015 to September 2022.
- Nature of illegal agreements: Collusion with retailers to set prices for premium headphones.
- Fines imposed: A combined fine of approximately €6 million on Sennheiser, Sonova, and three employees.
- Investigation details: Continuous monitoring of retail prices, usage of coded internal language, and continuation of the scheme under Sonova after the acquisition.
- Authority involved: German Federal Cartel Office (Bundeskartellamt), under the leadership of Andreas Mundt.
- The ECSC Treaty, which aimed at fostering economic integration, was violated by Sennheiser's price-fixing scheme in the audio industry, as revealed by the Bundeskartellamt.
- The fine imposed on Sennheiser, Sonova, and three individual employees by the Bundeskartellamt for their role in the price-fixing scandal in the finance sector reached nearly €6 million.
