Guitar-maker Fender allegedly pressured online retailers to sell its products at inflated prices. The European arm of the company has consequently been penalized £4.5 million ($5.9 million) for violating competition laws in the U.K., as the Financial Times reported.
The U.K.’s Competition and Markets Authority (CMA) issued its largest fine ever for Fender’s behavior. The regulator fined another music company, Casio Electronics, £3.7m in 2019 for the same online manipulation.
The CMA could have fined Fender, maker of the famous Stratocaster guitar, up to 10 percent of its global sales, but the regulator lessened the amount because Fender admitted its offense during the investigation.
Fender’s actions “fell well below the highest standards we set ourselves, and this is a matter of deep regret,” a company spokesperson said in a statement, adding that the group had “taken additional steps” to improve Fender’s adherence to all compliance rules and regulations.
After the company was revealed to have hidden important notebooks during a 2018 compliance investigation, Fender Europe was fined £25,000 for breaking CMA rules.
CMA CEO 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.”
“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 behavior,” she added. “Break competition law and you will face serious consequences.”
With annual sales approaching £440m in the U.K., guitar sales are a considerable part of the musical instrument sector, with online transactions generating about 40 percent of sales. Song streaming continues to grow as well.
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