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Fender was guilty of what, exactly?

Thursday, January 23, 2020 10:16

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From The Guardian:

The guitar maker Fender has been fined £4.5m for price fixing by the UK’s competition watchdog as part of its clampdown on the musical instrument industry.

The Competition and Markets Authority imposed the penalty on Fender Europe for breaking competition law by preventing online discounting for its guitars. It is the biggest fine issued in Britain for this type of price fixing, which is known as resale price maintenance.

Funny thing is that there used to be a Resale Price Maintenance Act which said exactly the opposite. Under that Act, the Corts would have intervened on behalf of Fender against the discounters (one of DBC Reed’s favourite topics).

UK supermarkets got together and got this Act overturned back in 2001, and rightly so IMHO.

If a company has a monopoly, especially a government protected one or a monopoly over “essentials”, then I can see an argument for government intervention, like price caps for mains water.

But Fender don’t have a monopoly on electric guitars and electric guitars are hardly “essentials”. They don’t even have a monopoly on the iconic Telecaster and Stratocaster shapes – other manufacturers have been making copies for decades, some of which are qualitatively better than Fenders for a lower price.

And if Fender don’t want to sell their guitars to somebody – for whatever reason – then under the general “freedom of contract” concept, I don’t see why they should be punished.

Source: http://markwadsworth.blogspot.com/2020/01/fender-was-guilty-of-what-exactly.html

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