Fender slapped with £4.5m fine for pressuring online retailers

EcommerceNews

Fender has been fined £4.5 million for pressuring online retailers to sell its instruments at high minimum prices in breach of UK competition law.

The musical instrument giant’s European arm was handed that largest fine on record for such behaviour by the Competition and Markets Authority (CMA).

Fender, which also sells instruments through its own website, reportedly told third party online retailers to sell its goods at or above a certain price, chasing them to raise the prices if they did not comply, between 2013 and 2018.

This comes just months after the CMA slapped keyboard maker Casio with a £3.7 million fine for similar conduct.

READ MORE: Etsy to buy Reverb for $275m

“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,” CMA chief executive Andrea Coscelli said.

“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.”

By law the CMA had the power to fine Fender 10 per cent of its global sales, which would have resulted in a fine over ten times the size, however as Fender admitted to the conduct it was let off.

A Fender spokesperson said that the company’s conduct “fell well below the highest standards we set ourselves and this is a matter of deep regret”.

In 2018 a Fender employee was found to have hidden 10 notebooks from the CMA during an inspection relating to its investigation, resulting in another £25,000 fine after they were handed over.

Click here to sign up to Charged‘s free daily email newsletter

EcommerceNews

RELATED POSTS

1 Comment. Leave new

  • Avatar
    Dale Fletcher
    January 27, 2020 3:19 pm

    What the CMA clearly misunderstands is that by not allowing Fender and the like to ensure its retailers earn a decent return it will actually damage consumers long term, not help them. Consumers will eventually have both choice and the quality of their advice restricted. Instead, quick-buck retailers selling online will limit the choice offered and have no idea about the product they are offering. Margins will reduce to a point where no one can make any money from selling the product in-store, and even the e-tailers struggle to get a decent return.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.

Menu

SUBSCRIBE TO OUR NEWSLETTER

Sign up to our daily newsletter to get all the latest retail tech news and insights direct to your inbox.

  • This field is for validation purposes and should be left unchanged.