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October 14, 2019
On 8 October the Competition and Markets Authority (CMA) announced that it has issued a Statement of Objections to Fender Europe, which provisionally finds that between 2013 and 2018, Fender Europe engaged in illegal resale price maintenance (RPM) by operating a policy designed to restrict competitive online pricing, by requiring guitars to be sold at or above a minimum amount.
The CMA’s findings are provisional, and no final decision has been made about whether there has been a breach of competition law. The CMA will now carefully consider any representations from the company before reaching a final decision.
According to the CMA’s press release, Guitars make up a significant part of the wider musical instrument sector which has an estimated turnover in the UK of around £440 million annually. Online sales of musical instruments have grown to around 40%, making it more important that people have access to competitive prices.
The CMA states that it takes allegations of RPM very seriously because it removes one of the benefits of the internet of making it easier to quickly find a better price by shopping around. It stops online retailers from selling at the prices they want to, and this then leads to higher prices for customers.
The CMA has fined companies for online RPM in four cases; most recently in August 2019 in the digital pianos and digital keyboards sector (see here). The CMA has three other ongoing antitrust
To read the CMA’s press release in full, click here.