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Guitar maker Fender fined £4.5m by watchdog over price-fixing

By Henry Saker-Clark, PA City Reporter

The UK competition watchdog has slapped guitar manufacturer Fender with a £4.5 million fine.

The Competition and Market Authority (CMA) imposed the hefty penalty on Fender Europe for breaking competition law by preventing online discounting.

The move is part of recent efforts by the regulator to clamp down on the musical instrument industry which also saw it fine keyboard maker Casio £3.7 million for price-fixing last year.

Fender’s fine was slashed from £14.2 million after it admitted the offence.

The company said it pursued a policy designed to restrict UK retailers from cutting online prices between 2013 and 2018.

Over the five-year period, Fender required its guitars to be sold at or above a minimum price.

The practice is illegal as it often leads to customers missing out on the best deals because, even when they shop around, they find all retailers tend to be selling at a similar price.

During its investigation, the CMA said it found evidence that Fender on occasion pressurised retailers to raise their online prices, after being tipped off when they were not toeing the line.

The watchdog said it also found that certain Fender employees deliberately tried to cover up their actions by recording as little as possible in writing.

However, it said emails and texts from company servers and mobile phones helped to reveal the illegal behaviour.

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.

“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.”