Sennheiser is recognized for its high-quality headphones and audio equipment, recently releasing a new pair of open earbuds. Once a contender in the consumer-friendly headphone market alongside brands like Sony and Skull Candy, Sennheiser now finds itself facing legal repercussions for price-fixing in the sale of its products. This issue involves not only Sennheiser but also another company, Sonova, which acquired Sennheiser’s consumer headphone division in 2022.

Upon taking over, Sonova continued Sennheiser’s previous practices, leading to both companies being implicated in the scandal. Moreover, several employees who were aware of these unethical practices are also facing scrutiny. Price-fixing is particularly concerning as it disrupts fair market competition by artificially inflating prices, impeding consumers from finding reasonably priced options.

Sennheiser headphones have generally been considered high-end and not particularly affordable. Evidence suggests that the company actively sought to maintain higher prices for its products. A report revealed that Sennheiser monitored the prices at which its distributors sold their headphones, employing techniques like web-scraping and manual checks.

Should a distributor price their headphones below the manufacturer’s suggested retail price (MSRP), Sennheiser pressured them to raise the price, effectively stifling competitive pricing. Even after Sonova took over, the practice continued on a smaller scale from March to September 2022, while Sennheiser had been implementing it since 2015. This operation lasted for seven years until it was uncovered by regulators in Austria and Germany, prompting Sonova to halt the practice.

Despite this, Sennheiser, Sonova, and several implicated employees were collectively fined approximately €6 million for their involvement in the scheme. This case underscores the significant implications price-fixing can have on market dynamics and consumer choice.