Bundeskartellamt imposes fine on audio equipment manufacturer Bose

The Bundeskartellamt has imposed a fine totalling around 7 million euros on Bose GmbH, which is based in Friedrichsdorf, on account of resale price maintenance. Bose manufactures and distributes high-end consumer electronics. The company’s activities in this area mainly focus on the distribution of audio products, especially speakers and headphones. The proceeding was initiated within the context of a request for official assistance by the Austrian competition authority and a dawn raid conducted in March 2018.

Andreas Mundt, President of the Bundeskartellamt: “We are accusing Bose GmbH of having hampered the free formation of prices in the distribution of their audio products through the authorised dealers involved. The company tried to make sure that the prices for headphones or speakers, for example, did not significantly undercut the recommended retail price (RRP). Such practices adversely affect price competition and, in principle, harm consumers. This case is one of several other cases in which we recently imposed fines on manufacturers of musical instruments or school bags. The message is clear: Resale price maintenance is not tolerated and will be pursued resolutely.”

In addition to conducting the usual negotiations on purchasing prices, Bose employees also agreed on concerted measures for setting sales prices with the authorised dealers in question. These measures generally pertained to an increase in sales prices, which were also specifically set in some cases. In this way, Bose wanted to prevent that the sales prices offered by the authorised dealers deviated – in the company’s view – too much from the recommended retail prices. This was monitored by Bose employees. The company intervened on several occasions in which the dealers had deviated from the recommended resale price and the dealers stopped the conduct objected to in a number of cases. The dealers in question played their part in this by complaining to Bose about the (too) low sales prices offered by other authorised dealers.

In setting the fine the authority took into account that Bose had cooperated extensively with the Bundeskartellamt and that a settlement could be reached. The order imposing the fine is final. No fines were imposed on the dealers involved and the persons acting on behalf of Bose.

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