Judge Dismisses Suit Against GC and NAMM

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Just to show how slow the wheels of justice actually move, a class action suit against NAMM, Guitar Center, Fender, Korg, Martin, Peavey and a dozen more MI vendors started in 2009 has finally been dismissed for lack of evidence.

The suit involved 38 separate plaintiffs from 15 states, and alleged that NAMM, GC and the various manufacturers conspired to raise the minimum advertised price (MAP) policies, thereby bilking musicians out of hundreds of millions of dollars in the process. What the suit basically said is that GC and the various manufacturers unlawfully restrained trade and artificially reduced competition, thereby violating the Sherman Antitrust Act.

After numerous court exchanges, the judge couldn't find any evidence to support the allegation, and threw the case out. The MI industry finally breathed a sigh of relief since the damages could have been north of $200 million, which would have really hurt in this economy.

Okay, so here's the reality as I see it. Guitar Center is definitely guilty of wanting to monopolize the MI retail business, and they've successfully done that, but not by conspiracy. They've achieved their monopoly by bullying the manufacturers. If anyone thinks that the manufacturers want to go along with GC's pricing policies, they're sorely mistaken. GC forces a manufacture to sell to them almost at a price they determine, not the manufacturer, so the only one making out in the deal is GC, not the rest of the industry.

And NAMM? The last thing they want to see is less competition, since the more market share GC gets, the less relevant they become. Bottom line, this was a misguided suit from the beginning.

That said, GC is the big winner, as always. You know you owns them? Bain Capital. Ring a bell, by any chance?
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