BACK TO TOP

Korg and Roland formally accused by CMA of illegally preventing discounts

The UK CMA (Competitive Markets Authority) has “provisionally found” that Roland and Korg could be fixing prices and illegally preventing discounts on their products.

Casio and Fender faced financial penalties last year after investigations into anticompetitive activities in the musical instrument market. The CMA is yet to announce its final conclusion on Roland and Korg, or what repercussions the brands may face for its alleged activities.

The CMA issued a formal statement, detailing its decision in issuing separate Statements of Objections to Roland U.K Limited and Korg UK. It said: “The CMA has provisionally decided that both companies operated policies restricting online price competition. The CMA provisionally considers that Roland required its electronic drum kits to be sold at or above a minimum price between January 2011 and April 2018, while Korg did the same for its specialist equipment such as synthesizers and DJ production tools, from June 2015 to April 2018”

The CMA does not specify exactly which products are in question in this accusation. However, Korg’s synthesiser releases in this time include the Kross 2, Monologue, Minilogue 1.2 and Volca FM.

Korg Volca Mix

“This illegal practice, known as resale price maintenance (RPM), aims to prevent retailers from offering lower prices– meaning there are few discounts available, even when people shop around”, the statement continues. “The CMA’s investigations into Roland and Korg follow recent fines issued to the keyboard supplier Casio and the guitar maker Fender for similar behaviour”.

“Developments in software have also made it easier for suppliers and retailers to monitor online prices, with Roland and Korg both subscribing to these services. As a result, suppliers can use a ‘Big Brother’ approach to identify lower online prices and put pressure on retailers to bump them up. The use of this ‘all-seeing’ software is also likely to force more retailers to comply with pricing rules in the first place, for fear of being caught and sanctioned.

Ann Pope, CMA Senior Director of Antitrust, reportedly said: ‘When someone at the top of the chain insists on setting a minimum price online, customers lose out. Online selling should offer people more choice and the chance to benefit from the competition – but this practice means that people can’t find lower prices when they shop around, which is one of the major advantages of internet shopping. That’s why we take any allegations of this kind very seriously.

‘It doesn’t matter whether electronic musical instruments and kit are being purchased by a world-renowned DJ or a music enthusiast setting up a home-studio – everyone should be able to buy at the best prices.

The CMA has not made a final decision on whether or not there has been foul play from the two companies. However, it will be considering representations from Roland and Korg before it reaches an absolute verdict.

We will update this article with more information as it comes.

For more music industry news click here.

The post Korg and Roland formally accused by CMA of illegally preventing discounts appeared first on MusicTech.