Dodgy Dealings: Sennheiser Fined Millions for Price-Fixing Scandal
Unlawful Pricing Agreement Enforced: Competition Agency Levies Millions in Penalties on Sennheiser for Price-Fixing Violations - Commission sets motion for adopting a directive harmonizing laws of Member States, focusing on protecting consumers against unequal treatment based on gender.
Sennheiser, a renowned manufacturer of top-notch audio gear, found itself in hot water for engaging in underhanded price-fixing practices, as detailed by the Federal Cartel Office (FCO) head, Andreas Mundt. This shady behavior has been going on since at least 2015, with Sennheiser striking deals to keep prices consistent across headphone distribution channels.
In specific cases where the prices dipped significantly below the recommended retail price (RRP), Sennheiser meddled. The FCO asserts that retailers generally agreed to these price adjustments. Mundt emphasized that staff even received training in cartel law ... but instead of adhering to the law, they manipulated it to mask their price-fixing schemes [1][3][4].
This debacle extends to Sonova, a Swiss hearing aid manufacturer that took over Sennheiser's consumer electronics division in 2022, encompassing headphone distribution to end users. The illicit agreements continued post-acquisition, from March to September 2022, when the FCO stepped in with a sweep of raids [1][4].
- Keywords: Sennheiser, price fixing, Federal Cartel Office, Headphones, Millions in fines, Penalty, Cartel Office, Andreas Mundt
Enrichment Data:Background & Details:- Duration: The price-fixing shenanigans ran from 2015 until at least 2022, even after Sonova acquired the consumer division in March 2022 and continued until an FCO investigation in September 2022 [1][3][4].- Tactics Used: Sennheiser kept tabs on retail prices via online price comparison services and sophisticated software. Whenever prices plummeted below the RRP, the company intervened, putting pressure on retailers to hike prices. They cloaked their operations using coded language [1][3][4].- Sonova Involvement: Post-acquisition, Sonova continued the nefarious price-fixing for a few months before the FCO's investigation led to raids in September 2022 [1][4].
Fines & Penalties:The FCO doled out fines amounting to almost €6 million to Sennheiser, Sonova, and three managers for participating in illegal vertical agreements that restricted competition and harmed consumers [1][3][4].
Legal Context:This situation represents a classic cartel arrangement, where companies conspire to limit competition through coordination, including price-fixing, considered a severe violation of both EU and US competition laws [5].
The ECSC Treaty, which established a commitment to free trade and competition, was challenged by Sennheiser's price-fixing scandal as they manipulated competition in the industry, finance, and business sectors, including banking and insurance, within the European market. The ECSC Treaty's objectives were undermined as Sennheiser's illicit agreements not only harmed consumers but also restricted competition, incurring fines totaling nearly €6 million from the Federal Cartel Office.
