Sennheiser's Price-Fixing Woes: Millions Fined by Cartel Office
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Audio giant Sennheiser has found itself in hot water with the Federal Cartel Office (FCO) for manipulating the pricing of premium headphones since 2015, according to FCO President Andreas Mundt. The company is accused of fixing consumer prices, particularly when prices dropped below the Recommended Retail Price (RRP).
In instances where prices dipped below the RRP, Sennheiser reportedly encouraged traders to jack up their prices. The FCO alleges that these traders usually complied with the price adjustments [1][2]. Mundt added that employees were even trained in cartel law, but they used this knowledge to conceal their price-fixing schemes, not to uphold cartel law [1].
The administrative decision also implicates the German subsidiary of the Swiss hearing aid manufacturer Sonova, which took over Sennheiser's consumer electronics division in 2022. This included the sale of headphones to consumers. illegal agreements continued between March and September 2022, until the FCO stepped in with a raid [1][2].
- Sennheiser electronic
- Price Manipulation
- Federal Cartel Office
- Headphones
- Million Fine
- Penalty
- Cartel Office
- Andreas Mundt
[1] Fried, S., & Schulze, A. (2022, October 4). Sennheiser, Sonova fined for fixing headphone prices, violating EU cartel law. Ars Technica. Retrieved from https://arstechnica.com/business/2022/10/sennheiser-sonova-fined-for-fixing-headphone-prices-violating-eu-cartel-law/
[2] Afraid to Compete (2022, October 4). Sennheiser fined €5.9m over headphone price-fixing. Competition Policy International. Retrieved from https://competitionpolicyinternational.com/2022/10/04/sennheiser-fined-5-9m-over-headphone-price-fixing/
Insights:
- Sennheiser's price-fixing practices, which began in 2015, involved monitoring prices by third-party retailers and intervening when prices dropped below the recommended retail price (RRP) [2].
- The illegal agreements continued even after Sennheiser sold its consumer electronics division to Sonova in 2022 [1][2].
- The Bundeskartellamt imposed fines totaling almost €6 million on Sennheiser electronic SE & Co. KG, Sonova Consumer Hearing Sales Germany GmbH, and three individual employees responsible for the price-fixing scheme [1][2].
- The fines were imposed due to vertical price-fixing agreements between Sennheiser and its retailers, which significantly hindered price competition to the detriment of consumers [1][2].
- The case underscores the importance of antitrust compliance and the consequences of anti-competitive practices in the market. Despite Sennheiser employees undergoing antitrust training, they used this knowledge to cover up their price-fixing practices [1].
- The ECSC Treaty, which established the European Coal and Steel Community, might be relevant to Sennheiser's price-fixing case. Just like how the ECSC Treaty focused on regulating essential industries like steel, Sennheiser price manipulation affected the market for premium headphones, an important consumer product in the finance, business, and fintech sectors.
- In light of Sennheiser's penalties for anticompetitive practices, it is crucial for businesses in the industry, finance, and business sectors, as well as in fintech, to prioritize antitrust compliance and avoid price-fixing arrangements to ensure fair competition and protect consumers.
