Fender Musical Instruments Europe Limited has been issued a Statement of Objections by the Competition and Markets Authority (CMA) on Tuesday, October 8.
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), 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 £440 million (US$537.2 million) 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.”
Full Content: UK Government
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.