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September 23, 2009

Guitar Center and NAMM Accused of Price-Fixing Guitars...

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Hagens Berman Sobol Shapiro filed a nationwide class-action lawsuit against Guitar Center and the National Association of Music Merchants (NAMM) claiming the two conspired to fix retail pricing on fretted instruments including guitars, allowing national music-retail heavyweight Guitar Center to secure higher profits and stamp out competition at the expense of consumers.

The suit, filed yesterday in U.S. District Court in California, claims NAMM organized meetings and programs where competing retailers including Guitar Center, were encouraged to discuss and agree upon strategies for price fixing along with other anti-competitive agreements with manufacturers.

The lawsuit also claims defendants conspired to squash competition from online retailers by collectively threatening to boycott manufacturers who sell through online competitors, among other tactics.

“Guitars and other fretted instruments comprise a multi-million dollar industry in the United States alone, and one that’s heavily influenced by a handful of industry giants like Guitar Center,” said Steve Berman, lead attorney and managing partner at Hagens Berman Sobol Shapiro. “We contend that, even with its market domination, the company acted illegally to rig the marketplace to its benefit.”