LONDON (Reuters) - Guitar-maker Fender has been fined 4.5 million pounds ($6 million) in Britain after it admitted breaking competition law by preventing retailers from discounting online prices for its instruments, which can run into thousands of pounds.
Between 2013 and 2018, the company, founded around 70 years ago in southern California by Leo Fender, required its guitars be sold at or above a minimum price in Britain, the UK's Competition and Markets Authority (CMA) said on Wednesday.
This kind of practice means that when customers shop around, they find retailers tend to be selling the same products for roughly the same price, the regulator said, leading it to impose its biggest such fine yet.
Aside from its eponymous brand, Fender Musical Instruments Corporation's line-up also includes Squier, Gretsch, Jackson, Charvel and EVH.
Its guitars, including the legendary Stratocaster and Telecaster, have been the choice of musicians ranging from Eric Clapton to Jimi Hendrix and Rory Gallagher.
"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," said Andrea Coscelli, CMA Chief Executive.
"This is especially important for expensive and popular items like guitars, and so Fender’s actions could have had a big impact on customers."
Fender said it cooperated with the CMA and has made changes to its practices.
"As a result of the investigation, we have taken additional steps to enhance our compliance procedures and our new EMEA executive team will continue to rigorously monitor the business’ adherence to antitrust and competition laws," said a spokesman.