Music firms illegally prevented discounts, CMA alleges

The Competition and Markets Authority (CMA) has today issued separate Statements of Objections to Roland (U.K) Limited (Roland) and Korg UK Limited (Korg), which supply electronic drum kits, and hi-tech music equipment and synthesizers to UK retailers, respectively.

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.

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 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.

Roland and Korg both manufacture instruments and equipment favoured by musicians and DJs involved in the electronic dance music (EDM) scene, which has grown into a large global industry over recent years. At the end of 2017, its global market value was estimated at £5.5 billion.