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Guitar business alleged to have broken UK law through online price restrictions

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UK competition authorities have made a provisional ruling that Fender Europe broke UK law when it required its guitars to be sold at or above a minimum price. 

The guitar brand is alleged by the Competition and Markets Authority to have tried to restrict competitive online pricing through a technique known as resale price maintenance (RPM) – which is illegal. The CMA today issued an initial statement of objections to Fender Musical Instruments Europe, but will listen to the company’s case before making a final decision.

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.”

This is the fifth case in which the CMA has fined companies for online RPM and it has issued  guidance setting out what RPM is and what it looks like in practice. In August, it issued its largest fine to date when Casio Electronics Co Ltd was fined £3.7m for RPM relating to preventing discounts on its digital pianos and digital keyboards. 

Fender EMEA spokesperson said: “Fender is co-operating fully with the CMA’s investigation and we are reviewing the provisional findings. Due to the ongoing legal process, we will not comment further at this time”.

Image: Fotolia

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