Sennheiser Caught in a Price-Fixing Scandal, Slapped with a Hefty Fine
Unlawful Arrangements: Sennheiser Faces Imposing Millions in Fines - Sennheiser faces a hefty one million dollar penalty for violations
Bust out those wallets a little lighter, folks! Sennheiser, the audio equipment manufacturer famous for its high-quality headphones, has been fined a staggering €6 million due to their illegal price-fixing practices. The Federal Cartel Office put them on the naughty list, accusing them of pressuring retailers to boost in-store prices.
The Bonn-based Federal Cartel Office's investigation revealed that Sennheiser has been keeping tabs on consumer prices of their premium headphones since at least 2015. They used price comparison websites and special software to detect retailers undercutting their recommended retail price (RRP). When spotted, these retailers were given a good old-fashioned talking-to and, more often than not, raised their prices. This essentially kept retail prices artificially high and left consumers with pricier headphones than they should have had to pay.
The Federal Cartel Office asserted that these actions were no mistake - Sennheiser employees were well-versed in competition law but chose to employ their knowledge to hide their wrongdoings.
To make matters more interesting, the Swiss company, Sonova, who acquired Sennheiser's consumer business in March 2022 and continues to produce equipment under the same brand, was also implicated. The agreement continued (to a lesser extent) even after the takeover, until the Federal Cartel Office raided in September 2022.
Three responsible Sennheiser employees will be paying a portion of the fine and Sennheiser's German subsidiary, too, is in the hot seat.
Sennheiser's price-fixing fiasco serves as a stark reminder that corporate misconduct can lead to significant financial and reputational consequences. Consumers should feel heartened by the ongoing efforts to enforce fair pricing and demand competitive prices from leading manufacturers like Sennheiser in the future.
- Sennheiser, the audio equipment manufacturer, has been fined €6 million for illegally pressuring retailers to boost in-store prices, as reported by the Federal Cartel Office in Hannover.
- The investigation by the Federal Cartel Office found that Sennheiser used price comparison websites and special software to monitor retailers who were undercutting their recommended retail price (RRP) since at least 2015.
- When such retailers were detected, Sennheiser employees would encourage them to raise their prices, keeping retail prices artificially high and leading to consumers paying more for premium headphones.
- The Federal Cartel Office believes that these actions were not accidental and that Sennheiser employees were well-aware of competition law but chose to hide their wrongdoings.
- Surprisingly, Sonova, the Swiss company that acquired Sennheiser's consumer business in March 2022, was also implicated in the investigation and the illegal price-fixing practices continued after the takeover, until the Federal Cartel Office raided in September 2022.
