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Federal German Cartel Office continues to take action against resale price maintenance by brand manufacturers: Fine on Bose

Locations

Germany

In November 2021 (the case summary was published end of December) the Federal German Cartel Office (FCO) has imposed a fine totalling around EUR 7 million on Bose GmbH (Bose) on account of resale price maintenance. Following the accusation, Bose had repeatedly enforced higher retail prices on its dealers. The FCO had already imposed fines on numerous brand manufacturers on account of such infringements. It can be expected that the FCO will continue to respond to complaints about such conduct in the future. In the context of this decision, the President of the FCO, Mundt, once again emphasized "Resale price maintenance is not tolerated and will be pursued resolutely".
 

Decision

Bose distributes its products (headphones, speakers) through independent authorized dealers in Germany and other EU countries. The authorized dealers are part of a selective distribution system based on qualitative criteria. According to the findings of the FCO, Bose employees had restricted the pricing of the products sold by its authorized dealers. In addition to the usual negotiations on purchasing prices, Bose and its dealers had also agreed on concerted measures for increasing sales prices. In some cases, they even agreed on fixed prices. According to the FCO, Bose wanted to prevent that the sales prices offered by the authorized dealers would deviate too much from its recommended retail prices.
 
Bose employees systematically monitored the price level of its dealers and intervened when prices would deviate. In some cases, the dealers stopped the conduct and corrected their prices. The authorized dealers also regularly complained to Bose employees about the low sales prices of other dealers, thus assisting Bose in monitoring the pricing behavior of its dealers.
 
In setting the fine, the authority took into account that Bose had cooperated with the FCO and that a settlement could be reached.
 

Background "resale price maintenance"

"Resale price maintenance" is given if a manufacturer obliges its dealers to sell its products only at a fixed or minimum price determined by the manufacturer. The prohibition does not only cover the obligation to sell products at determined prices. Undertakings may not attempt to induce other undertakings to engage in prohibited price maintenance, either by means of incentives or as a result of pressure. It is not necessary that the price maintenance is directly agreed between the undertaking exerting the pressure or promising an advantage and the recipient. The prohibition also covers the attempt to induce the recipient to agree on a price maintenance with a third party.
 

Further proceedings on resale price maintenance

The FCO has recently imposed several fines for resale price maintenance, e.g. on dealers and manufacturers of musical instruments and on a manufacturer of school bags (see Press Release of 05.08.2021 and Press Release of 17.08.2021).
 

Related links 

Federal Cartel Office: Case Summary FCO imposes fine on Bose
Federal Cartel Office: Press Release FCO imposes fine on Bose
 
 

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