Bundeskartellamt concludes mattress case with another fine

The Bundeskartellamt has fined Tempur Deutschland GmbH, Steinhagen, 15.5 million euros for imposing resale price maintenance on retailers selling its products.

Andreas Mundt, President of the Bundeskartellamt: "From August 2005 to July 2011 representatives of Tempur had agreed with the company's retailers that they should offer various mattresses both online and in their brick-and-mortar stores only at the sales prices recommended by Tempur. Manufacturers may give retailers price recommendations but these must be non-binding. It is prohibited for manufacturers to enter into binding agreements on retail prices with their retailers or even to pressurise them to enforce a certain price level. There can only be real competition if retailers are free to set their prices."

Most of the retailers adhered to the agreement because they knew that they would have to expect negative consequences from the manufacturer if their sales prices deviated from those recommended. The focus of the measures adopted by Tempur to ensure that the retailers observed the price recommendations was on the online trade because here the sales prices of the individual retailers are very transparent. If a retailer's sales price lay more than 5% below the recommended price, the retailer would usually be contacted by Tempur's sales representatives to induce him to raise his sales price to the recommended level. If the retailers did not subsequently alter their sales prices or repeatedly undercut the minimum sales prices set, they would experience in some cases considerable delays in supply or even a discontinuation of supply. Another measure taken by Tempur was to withdraw the right of a retailer to use the brand name for online advertising in Google search. The threat alone of sanctions by the sales represenatives was usually sufficient for the retailers to offer their products again at the minimum prices agreed. In the brick-and-mortar retail sector Tempur tried to induce retailers to explicitly exclude their products from general advertising campaigns such as e.g. "25% off everything".

The authority's investigations did not reveal any indication of anti-competitive horizontal agreements between the mattress manufacturers.

The proceeding was initiated in response to complaints within the market. As a consequence the Bundeskartellamt conducted a dawn raid in August 2011 at several companies in the sector. In August 2014 and February 2015 fines were also imposed on Recticel Schlafkomfort GmbH and Metzeler Schaum GmbH on account of resale price maintenance (see Bundeskartellamt press releases of 22.08.2014 and 06.02.2015). Todays's decision concludes the proceedings against the mattress manufacturers. After evaluating the evidence the Bundeskartellamt terminated the proceedings against two other manufacturers, two purchasing cooperatives and one online retailer for discretionary reasons.

In setting the fine account was taken of the fact that Tempur Deutschland GmbH had cooperated with the authority and a settlement could be reached. The fine is not yet final and can be appealed to the Düsseldorf Higher Regional Court.