Slapped with a Big Fine: Sennheiser and Sonova Caught in Price-Fixing Scandal
Unlawful Conduct: Sennheiser Faced with Millions in Penalty for Illegal Activities - Sennheiser faces severe penalties, requiring a payment of one million in the form of a fine.
Chatterbox headphone legends, Sennheiser, face a hefty fine of six million euros due to their sneaky price-fixing tactics. The Federal Cartel Office, who's based in Bonn, Germany, accused the Wedemark, Hannover-based company of manipulating retailer prices to secure higher in-store sales.
Since as far back as 2015, Sennheiser had its eye on the selling prices of its products. Retailers who dared to sell below the manufacturer's recommended retail price (RRP) were straight-up asked to adjust their game.
The Federal Cartel Office marked the move as deliberate, as employees were schooled in competition law but used their smarts to hide the wrongdoings.
This isn't a one-man show, though. ~~Three responsible employees~~ The company's top dogs are in this hot water, and the German subsidiary of hearing aid manufacturer Sonova is also getting a piece of the action. Sonova Consumer took over Sennheiser's consumer business back in March 2022 and kept the brand alive.
The unlawful agreements didn't end with the takeover, lingering just under the radar until the Federal Cartel Office decided to swoop in and investigate in September 2022.
Players Involved
- Sennheiser electronic SE & Co. KG
- Federal Cartel Office
- Headphones
- Multi-million fine
- Price-fixing
- Germany
- Bonn
- Vertical price fixing
- Agreement
- Bundeskartellamt
- Hannover
The Nuts and Bolts:
- Culprits: Sennheiser electronic SE & Co. KG and Sonova Consumer, along with three managers.
- Alleged Offense: Engaging in illegal price-fixing practices, specifically vertical price-fixing, which involves manufacturers setting specific resale prices.
- Regulatory Body: The German Federal Cartel Office (Bundeskartellamt).
Legal Lowdown:
Vertical price-fixing is the practice where manufacturers team up with distributors to set specific resale prices. This activity can limit competition in the market and is often frowned upon by antitrust authorities, who aim to safeguard fair market competition.
What's The Damage?
The hefty fines serve as a wake-up call to companies about the importance of adhering to antitrust regulations to avoid such punishment. The enforcement action taken also aims to protect consumers by ensuring competitive pricing in the market.
- Sennheiser electronic SE & Co. KG, along with three managers, are facing a six million euro fine for engaging in illegal vertical price-fixing practices.
- The price-fixing scandal involved Sennheiser manipulating retailer prices for their headphones, with any retailer selling below the manufacturer's recommended retail price (RRP) being asked to adjust.
- The German subsidiary of hearing aid manufacturer Sonova, which took over Sennheiser's consumer business in March 2022, is also implicated in the price-fixing practices.
- The regulatory body responsible for this enforcement action is the German Federal Cartel Office, based in Bonn, who launched an investigation in September 2022.
