Fender Europe Slammed With Record-Breaking Fine By Competition & Markets Authority For Preventing Guitar Price Discounts Online
January 25, 2020, 2 months ago
According to a report by Music Radar, the Competition & Markets Authority in Europe has fined Fender Europe a total of £4.5 million (approximately €4,7 million Euro, $5.2 million US) for breaking competition law by preventing online discounting of its guitars. The guitar manufacturer has admitted breaking competition law by "pursuing a policy aimed at restricting UK retailers from discounting their online prices" according to today's announcement from the UK government.
From 2013 to 2018, the CMA reports that Fender required its guitars to be sold at or above a minimum price. This is an illegal practice, also known as 'resale price maintenance.' During the course of its investigation, the CMA found evidence that there were occasions when Fender "pressurised retailers to raise their online prices, after being tipped off that they were not toeing the line."
The CMA also found examples of Fender employees deliberately trying to cover up their actions "by recording as little as possible in writing."
"It is absolutely essential that companies do not prevent people from being able to shop around to buy their products at the best possible price," says Andrea Coscelli, CMA Chief Executive. "This is especially important for expensive and popular items like guitars, and so Fender’s actions could have had a big impact on customers. Quite simply, this behaviour is against the law. The fact the CMA has imposed large fines on major musical instrument firms Casio and Fender in a matter of months should be a lesson to this industry and any other company considering illegal behaviour. Break competition law and you will face serious consequences."
Read the complete report here.