Decision
RPM
Further RPM proceedings
In November 2021, the Federal German Cartel Office (FCO) fined Bose GmbH approximately €7 million on account of resale price maintenance (RPM).(1) According to the accusation, Bose had repeatedly enforced higher retail prices on its dealers. The FCO has already imposed fines on numerous manufacturers for such infringements; therefore, it is expected that it will continue to respond to complaints about such conduct in the future. In the context of this decision, Andreas Mundt, the president of the FCO reemphasised that "[r]esale price maintenance is not tolerated and will be pursued resolutely".
Bose distributes its products (eg, headphones and speakers) through independent authorised dealers in Germany and other EU countries. The authorised dealers are part of a selective distribution system that is based on qualitative criteria. According to the FCO's findings, Bose employees had restricted the pricing of the products sold by its authorised 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 the sale prices that were offered by the authorised dealers from deviating 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 authorised dealers also regularly complained to Bose employees about the low sales prices of other dealers, thus assisting Bose in monitoring the pricing behaviour of its dealers.
When setting the fine, the FCO considered that Bose had cooperated during the investigation and that a settlement could be reached.
RPM occurs when a manufacturer obliges its dealers to sell its products at only a fixed or minimum price, which is determined by the manufacturer. The prohibition does not only cover the obligation to sell products at determined prices, but also prevents undertakings from inducing 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 be directly agreed between the undertaking that is exerting the pressure, or promising an advantage, and the recipient. Finally, the prohibition covers the attempt to induce the recipient to agree on a price maintenance with a third party.
The FCO has recently imposed several other fines for RPM, such as on dealers and manufacturers of musical instruments and on a manufacturer of school bags.
For further information on this topic please contact Sascha Dethof or Paulina Stemmler at Fieldfisher (Germany) LLP by telephone (+49 211 950 749 0) or email ([email protected] or [email protected]). The Fieldfisher (Germany) LLP website can be accessed at www.fieldfisher.com.
Endnotes