National Music Retailer Accused of Guitar Price-Fixing Scheme, Hagens Berman Sobol Shapiro Announces

National Music Retailer Accused of Guitar Price-Fixing Scheme, Hagens Berman Sobol Shapiro Announces

LOS ANGELES, Sept. 23 /PRNewswire/ -- 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.

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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."

The suit claims retailers met at NAMM meetings in 2001 and voiced concern that gross margins for sales would erode further from the then-current margins of 27 to 32 percent, and according to the complaint, the cabal's actions were successful with 2008 margins holding steady at 30 percent.

The NAMM meetings played an instrumental role in creating agreements between Guitar Center, other leading retailers and product manufacturers to impose 'resale price maintenance' agreements designed to raise and maintain retail prices for products, the suit states.

Today's filing isn't the first time NAMM has come under fire for its practices, noted Berman.

In March 2009, the Federal Trade Commission (FTC) issued a cease and desist order to NAMM. At the same time it settled charges that the acts and practices of NAMM "constitute unfair methods of competition in or affecting commerce" violating the Federal Trade Commission Act.

The suit seeks to represent anyone who purchased a fretted musical instrument from Guitar Center between Jan. 1, 2005 and Dec. 31, 2007.

Fretted instruments include banjos, acoustic and electric guitars, violins and more. The fret refers to the raised portion on the neck of the stringed instrument. On most modern instruments, frets are simply metal strips inserted into the neck to help expand music range and capability.

Anyone who purchased an instrument from Guitar Center during the outlined period can participate in this lawsuit. You can learn more here - www.hbsslaw.com/guitarcenter.

About Hagens Berman Sobol Shapiro

Hagens Berman Sobol Shapiro is a nationally recognized class-action and complex-litigation law firm based in Seattle with offices in Chicago, Boston, Los Angeles, Phoenix and San Francisco. Among recent successes, HBSS negotiated a $300 million settlement in the DRAM memory antitrust litigation, the largest antitrust settlement in U.S. history, recovered $340 million on behalf of Enron employees, and was part of the leadership team in the $3 billion Visa/MasterCard settlement. In pharmaceutical litigation, the firm's recent successes include a $350 million settlement with McKesson, more than $200 million with other parties in drug-pricing litigation, and a $150 million settlement regarding Lupron. HBSS represented Washington and 12 other states against the tobacco industry that resulted in the largest settlement in history. For a complete listing of HBSS cases, visit www.hbsslaw.com.

   CONTACT:    Steve Berman (206) 623-7292   Hagens Berman Sobol Shapiro   Steve@hbsslaw.com    Mark Firmani (206) 443-9357   Firmani + Associates   Mark@firmani.com  

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Source: Hagens Berman Sobol Shapiro

CONTACT: Steve Berman of Hagens Berman Sobol Shapiro, +1-206-623-7292,
Steve@hbsslaw.com; or Mark Firmani of Firmani + Associates, +1-206-443-9357,
Mark@firmani.com, for Hagens Berman Sobol Shapiro

Web Site: http://www.hbsslaw.com/

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Profile: International Entertainment