UK market regulator, the Competition and Markets Authority (CMA), has fined guitar manufacturer Fender Europe over resale price maintenance (RPM).
In October last year, the CMA alleged that Fender Europe was involved in the illegal practice of restricting the possibility of discounting for products online.
Fender’s guitars were sold at or above a minimum price from 2013 to 2018.
This practice of restricting UK retailers from discounting leads to customers missing out on the best deals and amounts to breaking competition law.
Fender Europe admitted to the allegation and confessed under the CMA’s ‘leniency’ and ‘settlement’ procedures.
CMA chief executive Andrea Coscelli said: “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. This is especially important for expensive and popular items like guitars, and so Fender’s actions could have had a big impact on customers.”
The CMA’s £4.5m penalty on Fender is the largest in the UK so far for resale price maintenance.
In August last year, CMA fined Casio £3.7m ($4.8m) for similar reasons in relation to digital pianos and keyboards.
The CMA has also released guidance to retailers on RPM.
Coscelli added: “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.”