Thursday, 23 January 2020

Fender was guilty of what, exactly?

From The Guardian:

The guitar maker Fender has been fined £4.5m for price fixing by the UK's competition watchdog as part of its clampdown on the musical instrument industry.

The Competition and Markets Authority imposed the penalty on Fender Europe for breaking competition law by preventing online discounting for its guitars. It is the biggest fine issued in Britain for this type of price fixing, which is known as resale price maintenance.

The funny thing is that there used to be a Resale Price Maintenance Act. Under that Act, the Courts would have intervened on behalf of Fender against the discounters, precisely the opposite of what they are doing now.. 

UK supermarkets clubbed together and had this Act overturned back in 2001, and rightly so IMHO. DBC Reed would hotly disagree.

If a company has a monopoly, especially a government protected one or a monopoly over "essentials", then I can see an argument for government intervention, like price caps for mains water.

But Fender don't have a monopoly on electric guitars and electric guitars are hardly "essentials". They don't even have a monopoly on the iconic Telecaster and Stratocaster shapes - other manufacturers have been making copies for decades, some of which are qualitatively better than Fenders for a lower price.

And if Fender don't want to sell their guitars to somebody - for whatever reason - then under the general "freedom of contract" concept, I don't see why they should be punished.


James Higham said...

Agreed, their biz.

Paul Lockett said...

I take a different view. If it's a limited company, they're operating with state granted privileges, so I'm comfortable sticking some customer-focussed obligations on them.

Curtis said...

I agree with PL, and the same applies to the gay cake mentioned in the previous post.

After the final appeals etc. I understand that the supreme court's position was that the bakers were not discriminatory. This was because they would have refused to make a cake supporting gay marriage for any customer, even one who is not gay.

If a gay customer asked for a cake supporting traditional marriage, they would have made the cake. They didn't have any objection to serving a gay person, they only objected to writing a message that was against their personal beliefs.

I agree with this conclusion, which seemed obvious from the start, so I don't know why they initially lost the discrimination case - poor arguments from their lawyers maybe.

Thus, they have "freedom to contract" in that they can't be forced to make a product they don't want to make.

But if they refuse to serve a customer merely because the customer is gay (which they didn't do) I think they should be punished - if they offer a product and are operating with state-granted privileges, all customers should be allowed to take up their offer.

Obviously they should still be able to refuse customers for non-discriminatory reasons. And in practice if a business wants to discriminate, just don't make the reason for refusal obvious.

Lola said...

The CMA is another self serving unaccountable bureaucratic racket. They invent stuff like this to justify their existence. This is their 'marketing'.

Lola said...

A similar thing that annoys me is when these parasitical regulationists apply arbitrary sanctions to the victims of crimes. For example, a bank gets it systems hacked - by a criminal - and the bureaucrats fine the bank for letting it happen. That's like fining the victim of a mugging.

These parasites so have to be shut down. Now.