The CMA has today issued the first decision in which it has fined a retailer for resale price maintenance (RPM). To date, fines have only been imposed on the manufacturer or wholesaler requiring that the minimum price be charged to customers.

A retailer of musical instruments, GAK, had complied with the minimum pricing rules of its supplier, Yamaha. GAK agreed to pay the CMA a maximum fine of more than a quarter of a million pounds to settle the case. However, in a cruel twist of fate, Yamaha was not fined, as it was granted leniency from punishment in return for bringing its own infringement to the attention of the CMA.

The CMA also announced today that it is now using software to monitor pricing practices in the musical instruments sector, to enable it to spot RPM. It plans to roll out this monitoring tool to other sectors shortly.

In light of these developments, distributors and retailers should review their pricing practices to ensure they are not engaging in RPM. Supply contracts should be checked to ensure they do not contain inappropriate pricing clauses, such as those in which the supplier sets the resale price or, though not fixing the price, encourages, or discourages, compliance with a suggested resale price or RRP. If they do, seek further advice on what to do.

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Vivienne Robinson Solicitors is the trading name of Vivienne Robinson Ltd, a law firm regulated by the Solicitors Regulation Authority (SRA no. 598617) and insured by Liberty Mutual.
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