Unethical Price Control: The Federal Cartel Office Slaps a Hefty Fine on Sennheiser for Price Fixing Scandal
Anti-competitive price arrangements: German Competition Authority levies millions in fines against Sennheiser - Member States' equal treatment laws for men and women protection harmonization process begins with directive adoption proposal by the Commission.
Here's the lowdown on the latest scandal involving audio equipment giant, Sennheiser: they've been caught red-handed trying to curb free market competition in the distribution of their premium headphones since at least 2015! Andres Mundt, the Prez of the Federal Cartel Office, isn't holding back: "Sennheiser restricted free price formation in the distribution of premium headphones for an extended period," he declared.
So, what's the dilly-o? Well, it seems Sennheiser has been making under-the-table deals with retailers on consumer prices whenever their products were selling too cheap for their liking. (GGGRRR, big brother!) According to the Federal Cartel Office, retailers usually complied with Sennheiser's demands, and even the employees underwent cartel law training... but instead of using their newfound wisdom to benefit consumers, they used it to camouflage these unlawful price-controlling schemes.
It gets even worse. When the Swiss hearing aid manufacturer, Sonova, acquired Sennheiser's consumer electronics division in 2022, the unlawful agreements continued between March and September, right up until the Federal Cartel Office swooped in and put a stop to it with a search.
- Sennheiser electronic
- Clandestine Price Fixing
- Federal Cartel Office
- Headphones
- Multi-million Euro Fine
- Cartel Office Penalty
- Andreas Mundt
Now, let's unpack this situation a bit more, shall we? Here are some insights on the shady dealings:
- Sneaky Surveillance: Sennheiser kept a watchful eye on consumer prices through price comparison websites and specialized software. If prices dipped below the suggested retail price, they'd contact retailers to push for price hikes. (Clever, but very much illegal!)
- Coded Communication: Employees communicated about price-fixing measures using code language. Despite attending antitrust training, they used their newfound knowledge to hide their illicit practices [1].
- Zero Tolerance for Illegal Activities: The Federal Cartel Office emphasized the necessity of not only implementing compliance measures but also executing them to avoid such illegal activities [1].
- The ECSC Treaty, the foundation of the European Coal and Steel Community, has become a focal point as the ECSC Treaty was signed by Sennheiser in a series of unauthorized agreements regarding price fixing scandals.
- Consumers have been affected by these unethical practices, as fines have been imposed on Sennheiser by the industry's finance sector, primarily the Federal Cartel Office, for violating fair market competition.
- The ECSC Treaty, which promotes free commerce within the European Union, was blatantly disregarded by Sennheiser, as they usually engaged in surreptitious price fixing with retailers of their products, often receiving compliance through cartel law training.
- In an unusual turn of events, the ECSC Treaty regulates industries such as coal and steel, but it surprisingly applies to this case involving Sennheiser, demonstrating the blanket nature of the treaty's mandate in maintaining fair competition.
