Bundeskartellamt imposes fines on audio products manufacturers Sennheiser and Sonova

The Bundeskartellamt has imposed fines totalling almost 6 million euros on Sennheiser electronic SE & Co. KG, based in Wedemark, on Sonova Consumer Hearing Sales Germany GmbH, based in Wedemark, and on three employees responsible due to vertical price fixing. Under the brand name Sennheiser, high-quality products in the field of consumer electronics are produced and sold, with a focus on the sale of audio products, particularly headphones. Sonova took over this business area, including employees and brand usage rights, from Sennheiser in March 2022 and continued the price-fixing practices until September 2022. With this sale, Sennheiser completely withdrew from the business area of consumer electronics.

The proceeding was initiated within the context of a request for official assistance by the Austrian competition authority (BWB) and a dawn raid conducted in September 2022.

Andreas Mundt, President of the Bundeskartellamt: “When it comes to illegal cartels, what first comes to mind are agreements at the same market level, for example between manufacturers or between retailers. However, price competition is also significantly hindered to the detriment of consumers if manufacturers and their retailers conclude agreements on fixed retail prices. Over a long period of time, Sennheiser hampered the free pricing of premium headphones. It constantly monitored end consumer prices and intervened when necessary to have the retailers involved raise their prices. The Sennheiser employees even underwent antitrust training but used that knowledge to cover up their price-fixing practices. This illustrates that companies must not only adopt compliance measures but also put them into practice.”

Since at least 2015, in addition to conducting the usual negotiations on purchasing prices, Sennheiser employees also agreed on concerted measures for setting end consumer sales prices for “premium headphones” with their authorised dealers in Germany. These measures generally pertained to an increase in end consumer prices. The retailers’ end consumer prices were continuously monitored using online price comparison services and in some cases also special software. The measures were implemented, to a varying extent, especially when end consumer prices were considerably below the recommended resale price (RRP) or after retailers had complained about inadequate end consumer prices. Whenever Sennheiser intervened in this way, the retailers approached usually agreed to raise the end consumer prices in question or adjusted their prices upwards. Internally, employees used a “code language” for the concerted measures, referring to compliance with selective distribution criteria. After Sonova took over this business area from Sennheiser, the measures were continued to a lesser extent until the Bundeskartellamt’s dawn raid in September 2022.

In setting the fine the Bundeskartellamt took into account that Sennheiser and Sonova had cooperated extensively with the Bundeskartellamt and that a settlement could be reached. The orders imposing the fines are final. The Bundeskartellamt decided not to impose fines on the retailers involved.

A case summary in accordance with Section 53(5) of the German Competition Act (GWB) will be published shortly on the Bundeskartellamt’s website.