The Competition and Markets Authority has provisionally found that Casio has broken competition law by restricting retailers’ freedom to discount online.
Digital pianos and keyboards are a significant part of the wider UK musical instruments sector which is estimated at around £440m annually. On 17 April 2018, the CMA launched an investigation under Chapter I of the Competition Act 1998 and Article 101 of the Treaty on the Functioning of the European Union into suspected breaches of competition law by various parties. The investigations relate to alleged anti-competitive agreements and/or concerted practices in relation to musical instruments and equipment.
The CMA has now issued a Statement of Objections to Casio Electronics Co. Ltd (Casio) which, as part of its business, supplies digital pianos and keyboards to UK retailers. The CMA has provisionally decided that Casio implemented a policy designed to restrict retailers’ freedom to set their own prices online between 2013 and 2018, requiring them to sell at, or above, a minimum price, and therefore preventing them from offering price discounts.
This resale price maintenance means customers miss out on the best possible prices. Customers lose out on cheaper prices online because, even when they shop around, they find all retailers tend to be selling at around the same price.
In recent years, software has also made it easier for both suppliers and retailers to monitor online prices. As a result, suppliers can find out more quickly about lower online prices and can put pressure on retailers to stick with the agreed price. The use of such software is also likely to reduce further the incentives for retailers to reduce their prices in the first place for fear of being caught and being sanctioned.
The CMA’s findings are provisional and no final decision has been made about whether there has been a breach of competition law. The CMA will says that it will now carefully consider representations from the company before reaching a final decision.