Fender has been fined £4.5 million for flouting corporate competition laws, it has been revealed.
Handing down the fine, the Competition and Markets Authority (CMA) said the premium guitar manufacturer admitted breaking competition laws by “pursuing a policy aimed at restricting UK retailers from discounting their online prices”.
The regulator first launched an inquiry into Fender in October 2019 after reports of the manufacturer restricting competitive online pricing, requiring guitars to be sold at or above a minimum figure.
The regulator found that, from 2013 to 2018, Fender required its guitars to be sold at a predetermined price, leading to consumers missing out on the “best deals” because retailers were forced to sell at “similar prices”. It also found that Fender pressured retailers to raise online prices after “being tipped off that they were not toeing the line”.
The practice – known as resale price maintenance (RPM) – is illegal under European competition laws.
According to the CMA report, Fender “confessed under the CMA’s ‘leniency’ and ‘settlement’ procedures”, meaning it has agreed to cooperate with the investigation in return for a reduced fine. However, the £4.5 million penalty is still the largest imposed in the UK for price manipulation.
Commenting on the report, Andrea Coscelli, CMA Chief Executive, 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.
“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.”
A Fender spokesman said: “As a result of the investigation, we have taken additional steps to enhance our compliance procedures and our new EMEA executive team will continue to rigorously monitor the business’ adherence to antitrust and competition laws.”
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