UK competition authority Competition and Markets Authority (CMA), has issued Statement of Objections to two musical instruments suppliers, for breaching competition rules by resale price maintenance and preventing discount on online sales.
The suppliers are manufacturers of electronic drum kits, hi-tech music equipment and synthesizers that are used by musicians and DJs in the electronic dance music (EDM) sector which is a large global industry with an estimated market value of £5.5 billion in 2017.
CMA has provisionally decided that both companies operated policies restricting online price competition as follows:
CMA found that the undertakings have monitored online prices by using a software and intervened to increase prices when necessary. CMA has described this practice as the “Big Brother” approach, which creates a fear of being caught and sanctioned by retailers, ensuring that the prices imposed in this way are complied with.
In 2019 the CMA issued warning letters to the undertakings about resale price maintenance, alerting companies to the illegal nature of this practice and prompting action to ensure compliance. Similar to this case, CMA has also imposed fines recently to a piano supplier and a guitar maker for resale price maintenance.
(CMA – 24.03.2020)