German Federal Cartel Office spares Sennheiser’s online policy from scrutiny

by Gabriele Accardo

On 24 October 2013 the German Federal Cartel Office (“FCO”) stated (available only in German) that it will not open formal proceedings against Sennheiser, a manufacturer of consumer electronic products, following recent changes to the terms of Sennheiser’s online distribution agreements with its authorized dealers.

In April 2013 Sennheiser subjected its authorized online distributors to the same conditions as operators of traditional brick and mortar stores which meet specific quality criteria. Moreover, authorized distributors were prohibited from selling Sennheiser products via certain third party online platforms such as eBay and Amazon Marketplace.

In this respect, the FCO stated that Sennheiser could not prevent its authorized traders from selling over Amazon Marketplace, because Amazon itself is an authorized dealer, so the ban could not be justified by reasons such as over service levels and product display. Specifically, the FCO noted that the ban concerning a third party online platform would not be justified, if such a platform is fully integrated into the online distribution system of another authorized dealer (i.e. Amazon).

Interestingly, in its press release the FCO questions whether Amazon can be considered both an authorized dealer of a selective distribution system as well as “a third party” under the meaning of recital 54 of the Commission Guidelines on Vertical Restraints.

The FCO expects the above solution to be applied to eBay and other online market places.

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