Musical instrument firms Roland and Korg fined £5.5m over UK price fixing

The keyboard and electric drum kit makers Roland and Korg have been fined a combined total of £5.5m, as part of the UK competition watchdog’s crackdown on price fixing across the musical instrument industry.

The Competition and Markets Authority (CMA) said the companies breached competition rules by restricting online discounting of their musical instruments. The practice, known as “resale price maintenance”, forced retailers to sell instruments at or above a minimum price.

The watchdog said Roland restricted pricing of its electronic drum kits and accessories between January 2011 and April 2018, while Korg did the same for its hi-tech music equipment and synthesisers between June 2015 and April 2018.

Roland was fined just over £4m and Korg £1.5m.

Similar breaches resulted in a £4.5m fine against the guitar maker Fender in January, months after Casio was hit with a £3.7m penalty for the price fixing of keyboards and digital pianos last August.

The Roland and Korg cases mark the end of five separate investigations by the CMA covering major players in the sector, and bring the total fines to £13.7m.

The watchdog has now written to nearly 70 manufacturers and retailers across the sector warning them about their conduct. It has also issued an open letter to the industry, urging businesses to obey the law, “given the prevalence” of this kind of price fixing.

The regulator separately announced its first resale price maintenance case against an instrument retailer on Monday, saying GAK admitted to colluding with Yamaha over the online pricing of its instruments. The retailer has agreed to pay a fine of more than £250,000, which was increased by 15% when it continued to restrict prices after receiving a warning letter from the CMA.

However, the CMA granted Yamaha immunity from any fines for bringing the case to the regulator’s attention.

CMA’s executive director of enforcement, Michael Grenfell, said: “During the coronavirus outbreak, people are shopping online more than usual, including for musical instruments. Even before the pandemic, the CMA estimated that an average of around 40% of musical instruments were sold online, so it’s important that manufacturers and retailers do not illegally work together to keep prices high.

“Today’s announcements make clear the CMA’s determination to protect shoppers from illegal attempts to restrict discounting.”