CMA alleges guitar firm illegally prevented price discounts

Legal | Retail | South East

The Competition and Markets Authority (CMA) has today issued a Statement of Objections to Fender Musical Instruments Europe Limited, which supplies guitars to UK retailers.

The CMA has provisionally decided that between 2013 and 2018, Fender Europe operated a policy designed to restrict competitive online pricing, requiring guitars to be sold at or above a minimum figure.

The practice, known as resale price maintenance (RPM), is illegal. It restricts the possibility of discounting and, as a result, customers who shop around for a product are unlikely to find better deals.

Guitars make up a significant part of the wider musical instrument sector which has an estimated turnover in the UK of around £440m annually. Online sales of musical instruments have grown to around 40%, making it more important that people have access to competitive prices.

Ann Pope, CMA Senior Director of Antitrust, said: “Shopping online can make it much easier to compare prices and hunt down bargains – this can be especially important for potentially big purchases like a guitar.

“We take 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.”

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