Steinway dealers in the Zurich canton of Switzerland have been raided by police looking for evidence of unfair competition. The Competition Commission (Weko) has opened a formal investigation. Information is sketchy at present, but the case that has attarcted attention is the sale of pianos to the University of Arts (Hochschule der Künste). The dealers involved are contracted to the German branch of Steinways. If you know more, please keep us posted.
Don’t know anything about this, but I quite like the design of the piano above. Looks modern without being too tacky.
looks very tacky to me, particularly the curvy stand, yikes.
Does that mean that you now have to publish a (well Photoshopped) picture of a Yamaha, Boesendorfer, Bechstein, Fazioli etc for the sake of balance?
Only if they get raided, Fritz.
I can’t contribute to the discussion of the specific issues the Swiss investigation intends to address but can link anyone interested to how a specific state or territory in the United States can enforce, by reference to the text of specific statute, or general principles of antitrust, anti-cartel or unfair competition law, open competition in piano sales.
Brief answer about the U.S. legal situation: Only about half the U.S. states have specific statutes prohibiting secret commissions, and the rest use general principles of unfair competition. Despite efforts to interest state attorneys general and the Federal Trade Commission to apparent irregularities in the sale of pianos, I’m not aware that any American jurisdiction has undertaken such an investigation.
From professional experience, I know of concerns in the U.S. about whether certain piano manufacturers use secret commissions or performance restrictions that arguably restrain open and fair competition. I very much look forward to learning more about how the Swiss investigation proceeds because it may finally encourage American authorities that there is a problem and thank Norman for letting us know of the Swiss action.
Here is an interesting article which appeared this afternoon in “Die Welt” — all the more interesting because the accusations are apparently directed towards the German Steinway house and not so much the Swiss Steinway dealers:
http://www.welt.de/kultur/buehne-konzert/article111605311/Schwerer-Verdacht-gegen-Klavierbauer-Steinway.html
Unfortunately, I don’t know anything more than what I have read in the different newspapers. To sum up the situation from the above article, it seems that the Zürcher Hochschule der Künste (Zurich Academy of the Arts) is planning to build a big new complex, and for that they are planning an acquisition of about 60 grand and 70 upright pianos. The monetary volume of the acquisition is so large that the Zurich cantonal building authority (Hochbauamt des Kantons Zürich), and not the Academy itself, is managing it.
The following part of the article is particularly interesting, as it seems to contradict what usually happens in Switzerland — don’t forget that it was only in 2009 that the Swiss parliament made parallel imports of cars, etc. legal:
«Mehr als dreißig Klavierhändler bewarben sich um den lukrativen Auftrag – darunter auch zwei Steinway-Händler. Doch bevor über die Angebote entschieden werden konnte, soll der Hersteller Steinway selbst bei der Baudirektion zugunsten eines der beiden Händler interveniert haben. Mit dem Hinweis: Nur dessen Angebot könne Steinway unterstützen, das andere nicht.»
«Die Beamten der Baudirektion schalteten die Wettbewerbshüter ein. Die stellten weitere Recherchen an und haben nun Hinweise, dass Steinway systematisch ein Netz von illegalen Absprachen über die Schweiz gelegt haben könnte.»
«”Wir haben den Verdacht, dass es beim Handel mit Steinway-Instrumenten in der Schweiz vertikale und horizontale Absprachen gibt: also Absprachen zwischen dem Hersteller und einzelnen Händlern sowie Absprachen der Händler untereinander”, sagte ein WEKO-Spracher der “Welt”.»
Translation (my own):
“More than 30 piano dealers have submitted bids for the contract — including two Steinway dealers. But before the bids could be considered, it seems that the Steinway home office (i.e. in Germany!) has intervened, favoring one of the two [Steinway] dealers over the other, in other words: We can only support one of the bids, the other not.”
“The officials of the building authority then summoned the Swiss fair trade officials [the Weko] to investigate. After they had investigated, indications were found that Steinway may have systematically built up a network of illegal price agreements over Switzerland.”
“‘We suspect that there are horizontal as well as vertical price agremments in place when dealing with Steinway instruments in Switzerland. In other words: deals between the manufacturer and individual dealers as well as between the dealers themselves.’, a WEKO spokesperson told ‘Die Welt’.”
This will definitely be interesting to see how it pans out, especially considering the history of forbidden parallel imports in the past.
I find the police raid on Steinway for alledged breach of AntiTrust laws refreshing. In an industry akin to religion in its fabric, musicians worship gods and great high priests. This empowers oligarchial like practices to the musical instrument gods Stradivarius, Steinway and others.
I hope questions in this investigation arise as to the nature and scope of the All Steinway Schools marketing ploy where all other brands are frog marched out the door under an exclusive agreement between Steinway and all too often public institutions to provide exclusively Steinway brand and their cheap Asian made lines. Outrageous, and totally unchallenegd it would seem!
Here’s an update on this story which appeared in the “Neue Zürcher Zeitung” this morning:
http://www.nzz.ch/aktuell/zuerich/stadt_region/lugano-liefert-fluegel-nach-zuerich-1.17899214
My summary of this article:
The decision by the Zurich Cantonal Building Authority, which is handling the acquisition of 58 grands and 65 uprights from Steinway & Sons through their Swiss dealers for the new facility being built for the Zurich “Hochschule der Künste”, was leaked to the press yesterday. It has been decided that the Luganese Steinway dealership “La bottega del pianoforte” is to deliver all of the Steinway grand pianos, and the Zurich dealership Musik Hug AG is to deliver only the uprights (or perhaps only some of the uprights — from the article it isn’t clear whether the Lugano firm will also supply some of the uprights or not).
The decision is independent of the still pending investigation by the Weko (Swiss Competition Fairness Commission) which was initiated after Steinway & Sons Hamburg intervened in the bidding process with the intent of favoring the Zurich dealer, Musik Hug, thus cutting out any of the other bidders.
I wonder what effect this decision will have on the inevitable follow-up support services (tuning and regulating)? Will they have dedicated piano technicians employed directly by the Hochschule (most likely, IMHO) or will they outsource the tunings, etc. to the dealers? Did the Lugano firm merely underbid Musik Hug, or was the decision made depending on other factors such as quality of service? It is hard to imagine that the latter would have played any role at all since all of the certified dealers’ technicians have to go through the same schooling at the Steinway factory in Hamburg, to the best of my knowledge. However, being a pianist myself, I know that there are sometimes big differences in skill level of piano technicians even within the same company.