Watchdog agency the Competition and Markets Authority (CMA) says Fender likely engaged in illegal price-fixing online.
The CMA says Fender’s European branch “impeded competitive online pricing” from 2013 to 2018. The US guitar maker imposed a minimum sale price on all vendors. The practice is known as resale price maintenance and it is illegal in Europe.
Fender is the world’s — Stratocaster, Telecaster, and Precision bass. The Fender Squier range has gained popularity among beginner guitar players. Some the world’s most well-known Stratocaster players include Eric Clapton, George Harrison, Jimi Hendrix, and Stevie Ray Vaughan.
CMA says it has been since April 2018. The company was recently fined £25,000 ($30K) for concealing notebooks at its European headquarters.
Casio was recently fined £3.7m ($4.5M) in August for restricting discounts on digital pianos and keyboards. That fine was discounted after Casio agreed to co-operate with the CMA.
CMA’s senior antitrust director Ann Pope says companies need to compete fairly online.
“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 resale price maintenance very seriously because it removes one the benefits the internet making it easier to quickly find a better price by shopping around.”
CMA reports that guitars make up a big part musical instrument sales in the UK. The UK instrument market is worth about £400m ($488M) annually. Online sales instruments have grown to about 40% the market. Fender controlling online prices actively gives the guitar maker control over the resell market, too.
The watchdog organization has not made a final decision if Fender broke the law. Representatives from CMA will listen to Fender’s version events before ultimately deciding the verdict later this year.