A costly lesson in resale price maintenance: Sennheiser fined EUR 6 million

The German Federal Cartel Office’s (FCO) latest fine against audio equipment manufacturers Sennheiser and Sonova looks modest on paper, yet it hits a nerve that keeps twitching across Europe’s competition landscape. The case is a good example of why resale price maintenance (RPM) continues to be a hot topic for regulators – especially now, in the age of algorithms.

Déjà vu

When I first read the FCO’s press release, EUR 6 million for systematically pushing retailers to comply with the recommended retail prices (RRPs) of Momentum-series headphones, I immediately recognized the familiar tone.

From 2015 onwards, employees of the headphone’s manufacturer not only continuously monitored online retail prices through comparison tools but also employed specialized software designed to quickly detect significant deviations from RRPs. Whenever this happened, or whenever retailers complained about inadequate consumer prices, Sennheiser did not hesitate to intervene. Retailers then apparently got the message loud and clear, “adjusting” their prices upwards.

It is a pattern one has seen before. Only last summer we dissected the AVM/Fritz!Box case (see here), where the FCO rang up nearly EUR 16 million for similar tactics in the router market. AVM’s offence? First coordinating consumer prices with the electronics retailers involved and then continuously monitoring them using in-store research and online price comparison services as well as specialised software. And back in March 2024, Pfanner paid the price for policing the margins of its partnering protective-clothing dealers (see here).

Lessons in (failed) compliance

What is perhaps most notable about the Sennheiser case is that the company had provided antitrust compliance training to its employees. Yet, these trainings were reportedly repurposed to help conceal RPM practices. Internally, staff resorted to coded language, framing their interventions as measures to uphold selective distribution standards. Notably, the pricing practices persisted even after Sonova acquired Sennheiser’s consumer audio business – continuing right up until the FCO’s surprise dawn raid in September 2022.

The tech trap

RPM rarely remains hidden indefinitely. Typically, regulators uncover these practices through whistleblower tips, retailer complaints, or strategic dawn raids – these days sometimes prompted by software detecting suspicious pricing patterns. Regulators now have their own algorithms to track price fluctuations, making it easier than ever for them to spot potential RPM practices.

At the same time, sophisticated price-tracking software has made RPM dangerously “easy” for manufacturers. Automated systems can swiftly shift from merely monitoring prices to actively reminding distributors of RRPs if they price too low, at the same time creating detailed digital records easily accessible by regulators during investigations. Such a tech-driven approach significantly increases both the effectiveness and risk of RPM strategies.

RPM beyond Germany’s borders

Germany is hardly the only jurisdiction flexing its muscles when it comes to RPM. France’s competition authority, for instance, closed 2024 with a jaw-dropping EUR 611 million fine for RPM-style coordination. Meanwhile, the UK’s Competition & Markets Authority is regularly sending out warning letters, tapping businesses on the shoulder before the hammer drops.

The political dimension

There is also a political dimension here that sometimes tends to get ignored. With inflation still bruising European voters’ wallets, any news that manufacturers are engineering higher shelf prices is headline material. Regulators know this and RPM enforcement offers quick, visible wins they can represent to the public as consumer protection in action.  In short: Expect more scrutiny, not less.

The final note

The Sennheiser case is another example that RPM is not fading – it’s evolving. For businesses, staying ahead means not just keeping their compliance systems up to date, but genuinely embedding compliant practices into their everyday operations.

Still not convinced? Then take another look at our 2023 post “A new hope for vertical price fixing?”. Two years on, anyone hoping for higher hurdles for RPM fines will be disappointed, as such hope has mostly turned into a steady stream of fines.

Photo by Rajiv Perera on Unsplash