It is not just locale dependent, but may also depend on the type of list you are sorting. So while German dictionaries ignore the umlauts as claimed, German phone books sort names with umlauts according their non-umlaut transcription (ä = ae, ö = oe, ü = ue). And I own an old encyclopedia that goes the other way and sorts words that are conventionally written with the non-umlaut transcription as if they were written with an umlaut, which is then ignored.

Dictionary: Goethe, Görlitz, Gotha, Gotik

Phone book: Görlitz, Goethe, Gotha, Gotik

Encyclopedia: Görlitz, Gotha, Goethe, Gotik