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Teaching Economics

In the News

Fender fined £4.5m for preventing online discounts

Graham Watson

23rd January 2020

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The Fender Stratocaster - iconic - and until recently not available at a discount online. That's because, as the Competition and Markets Authority (CMA) discovered, Fender had set a minimum price for guitars sold online.

This practice is known as resale price maintenance.

Bear in mind that 40% of guitar sales are online, and you can see that this sort of behaviour is clearly anti-competitive. Factor in that Casio have also been found guilty of this practice and fined £3.7m, and you might argue that Fender's executives should have known better.

This is one of those cases where I wonder if there shouldn't be some criminal liability here; it's not unreasonable to expect executives at Fender to be aware that they were breaking the law.

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Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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