The UK offices of US guitar giant Fender and those of four keyboard manufacturers – Yamaha, Korg, Casio and Roland – have been raided by officials from the Competition and Markets Authority (CMA), according to British daily newspaper The Telegraph. The raids are part of an ongoing investigation into price fixing that The Telegraph says was launched in April this year. No charges have yet been brought, and the investigation is at an “initial, informal evidence gathering stage”.
The companies were raided by up to 10 CMA officers in April, who apparently arrived unannounced at the five offices. The CMA doesn’t need a warrant and is allowed to enter a business to demand documents. The Telegraph cites a rumour that the investigation may have been sparked by “a complaint from Germany”.
The Telegraph also reports that the CMA has asked 14 music shops to provide details of their dealings with these five companies. The shops themselves are not under any suspicion, the paper says.r
This could have some serious long-term implications on how music companies operate across the country.
Suspected Anti-Competitive Agreements
You can read the CMA’s initial report here on their government website. Here’s a quick resumé of the most salient parts. The probe is focussed on
“suspected breaches of competition law by various parties” and “relate[s] to alleged anti-competitive agreements and/or concerted practices in relation to musical instruments and equipment” as well as “suspected anti-competitive agreements”
However, the CMA also states that its investigation is “at an early stage and no assumptions should be made that competition law has been infringed”.
Now that this has all officially come to light, what effect will this have on the UK and prices of musical equipment in the future?
It’s hard to say at this point what this investigation will mean. The penalties for violating anti-price fixing laws a stiff, with fines of up to 10% of a companies profits worldwide, company directors being disqualified for up to 15 years and up to 5-year jail sentences for individuals.
Musical Industries Association
In response, the MIA has reissued their official advice on the details of the UK laws here and advised all suppliers and retailers not to agree with one another to sell instruments at a set price, as they could be breaking the rules and be liable for a visit from the CMA.
Needless to say, we will keep you up to date as we learn more about this investigation.