After a full investigation in April 2018, the CMA imposed on 22 January 2020 on a fine from Fender Musical Instruments Europe Limited (Fender Europe), an international seller of guitar instruments, USD 4,521.185 (the highest fine imposed in the UK for maintaining the price (for resale) because of its violation of the section I prohibition of the Competition Act 1998 (Chapter I) because of the use of anti-competitive agreements and/or concerted practices for their network of guitar dealers and mass distributors designed to restrict the prices of competition on the Internet. During the investigation, the CMA found that Fender Europe resellers entered into an Authorized Sales Agreement (ADA) under which a distributor must meet a large number of requirements to store the products contained at this level. Under the ADA, Fender Europe has implemented a tariff policy to prevent resellers from advertising or selling these products online below a certain minimum price. The CMA found that this policy was motivated by complaints from resellers who wanted to improve their margins and increase the attractiveness of the Fender brand. The pricing policy, extended to all online sales of Fender Europe`s UK resellers, was based on a formula that allowed resellers to calculate the minimum price, prohibiting online discount codes and communicating orally to resellers, through Fender Europe, who distributed price lists, and was updated by subsequent calls to resellers. The CMA found that there was no written agreement, but that in the absence of an agreement, tacit tolerance was sufficient to form an agreement within the meaning of competition law. In the absence of the agreement, the CMA considered that resellers would have been able to determine their own prices and, as a result, the policy limited the competitiveness of the reseller and may have resulted in higher prices for consumers. If you want to know how lexology can advance your content marketing strategy, please email enquiries@lexology.com. “I think news feeds are extremely beneficial in keeping up with legislative changes. I have trained regularly to share a number of articles with our staff.

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