The CMA has announced that it has sent a statement of objections ('SO') to Fender Europe. The SO provisionally finds that Fender restricted retailers of its famous guitars from discounting (or Slash-ing their prices, if you will).
So-called "resale price maintenance" ('RPM') remains surprisingly common given it's long-standing position on the competition law naughty step. The EU Commission fined several retailers for RPM last year, but brands keep falling into the same trap.
Often, brands impose RPM without realising it is unlawful. The CMA has included with the press release one of a series of videos it has created to educate businesses about this complex area of law.
In a nutshell though, brands are not allowed to set a minimum price at which retailers or distributors can sell the contract goods. Maximum prices can be permissible, but generally anything that restricts the freedom of retailers to choose the price they sell products at needs to be thought about carefully.
The costs for breaking competition law can be substantial. Fines can reach up to 10% of global annual turnover, and 'follow-on' damages claims can add to that significantly.
The CMA has provisionally decided that between 2013 and 2018, Fender Europe operated a policy designed to restrict competitive online pricing, requiring guitars to be sold at or above a minimum figure.