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The CMA has fined two further musical instrument makers for breaking competition law

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The CMA has fined two further musical instrument makers for breaking competition law

The CMA has fined two further musical instrument makers for breaking competition law

The Competition and Markets Authority (“CMA”) has fined two further musical instrument makers for breaking competition law by restricting online discounting of musical instruments - resale price maintenance (“RPM”).

This brings the total number of businesses in that sector to four, involving total fines of £13.7 million.

Separately, a musical instruments retailer has also admitted to engaging in RPM with a manufacturer and agreed to pay a fine of more than a quarter of a million pounds. This is the first RPM case against a retailer.

UK and EU law ban undertakings from anti-competitive agreements, concerted practices and decisions by associations of undertakings which have as their object or effect the prevention, restriction or distortion of competition.

The scope for this illegal conduct is far wider than most people think and it is perhaps for that reason that the CMA has just taken three steps:

  1. Updated its advice for all retailers - view here 

  2. Written an open letter to the musical instruments industry - view here

  3. Written separately to almost 70 manufacturers and retailers across the sector, warning them to take swift action to ensure they are complying with the law or potentially risk an investigation and fines.

Any business which thinks it may have been involved in RPM has stark choices to make. Does it bury its head in the sand or investigate further? Does it just stop the activity and put in place systems to avoid a repeat or does it actually confess to the CMA?

Coming clean to the CMA will likely get the business partial or even complete immunity from the very big fine the CMA will hand out when it discovers the RPM from someone else and decides to investigate.

It’s worth thinking about.

Get in touch

For more information on this update, please contact Commercial Solicitor Sebastian Calnan