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Resale Price Maintenance is Illegal – an Expensive Reminder from the CMA
Resale Price Maintenance – the practice whereby manufacturers take steps to fix the prices at which retailers sell their products and prevent discounting – has been clearly illegal in the UK since 1964 and is now caught by Chapter 1 of the Competition Act 1998 and, in the EU, by Article 101 of the Treaty on the Functioning of the European Union, but still businesses get caught.
The Competition and Markets Authority has now fined Casio Electronics £3.7 million for systematically implementing a policy designed to restrict retailers’ freedom to sell digital pianos and keyboards online at or below a certain minimum price. Having issued the instructions, Casio then monitored prices and pressured retailers to raise prices when they fell below the minimum price.
Casio used new software that makes it easier to monitor online prices in real time and ensures compliance with its pricing policy and was also helped by retailers “snitching” on discounters.
The CMA and the EU Commission have been very active in investigating resale price maintenance in recent years with the CMA issuing 19 warning letters in 2018. It is also conducting 4 other anti-trust investigations in the musical instruments and equipment sector.
For those interested, the CMA has published a short video on RPM available on their website (www.gov.co.uk/) – or, of course, you can get face-to-face advice from us.