Competition law - Yamaha forced to change anti-internet distribution policy

Yamaha has been forced to abandon a discount scheme for dealers after an Office of Fair Trading investigation into the scheme was launched. The scheme provided discounts to Yamaha dealers who sold Yamaha's high-end electronic pianos and keyboards face-to-face rather than via the internet. The OFT was concerned that this was an anti-competitive incentive for dealers to trade through one medium (real shops) rather than another (the internet).

Yamaha decided to drop the scheme, so the OFT dropped its investigation before reaching a conclusion (announced 8 September 2006). This case followed a European Commission investigation, which did not cover the UK, which resulted in a €2.56million fine on Yamaha in 2003.

The case illustrates a perennial problem for suppliers of prestige goods such as cosmetics, clothing and musical instruments. Suppliers of such goods want their dealers' customers to enjoy the full experience of trying and buying in a shop, whereas far greater margins can be made by dealers selling online thereby reducing shop overheads.

Fundamentally, a ban on dealers using the internet will infringe competition law, but there are some tricks up the supplier's sleeve that we can help with.