Across five cases in less than a year, fines totalling £13.7m and warning letters sent to the entire industry, the UK Competition and Markets Authority (the "CMA") has put suppliers and retailers on notice that it will not tolerate efforts to fix or otherwise stabilise resale prices for consumers. While all five cases concerned activities in the musical instruments sector, the risks and lessons apply to vertical distribution arrangements in a much broader context and show that the CMA is prepared to clamp down hard on businesses which flout the rules.
So-called 'resale price maintenance' between manufacturers and distributors has long been illegal under competition law. However, the CMA's wide-ranging enforcement actions and ongoing monitoring of online resale prices within the musical instrument industry has underlined an EU-wide trend of regulators focussing on the controls manufacturers try to place on the online sales practices of their distributors.
Below we briefly summarise the CMA's latest enforcement actions in this sector and explore the key practical takeaways – which apply equally to the pricing practices of manufacturers and retailers both in and outside the sale of musical instruments.