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UK model agencies found guilty of price-fixing

Five major model agencies in the UK have been fined a combined £1.5m after being found guilty of price fixing.

Jourdan Dunn for Tommy Hilfiger autumn 15

Jourdan Dunn for Tommy Hilfiger autumn 15

Jourdan Dunn is represented by Storm, one of the agencies being fined. There is no indication that the alleged price fixing benefited Dunn.

FM Models, Models 1, Premier, Storm and Viva and their trade association, the Association of Model Agents (AMA), “colluded” instead of competing on prices for modelling services, The Competition and Markets Authority (CMA) found.

The alleged price fixing took place from at least April 2013 until March 2015.

The CMA said: “The parties regularly and systematically exchanged information and discussed prices in the context of negotiations with particular customers. In some cases, the agencies agreed to fix minimum prices or agreed a common approach to pricing.

“In addition, the AMA and the agencies sought to influence other AMA members by regularly issuing email circulars, known as ‘AMA Alerts’, urging AMA members to resist the prices offered by customers on the grounds they were too low.”

The collusion affected customers including “well-known high-street chains, online fashion retailers and consumer goods brands”.

Models 1, Premier and Storm said the CMA’s findings were “wholly mistaken” and the agencies will be appealing the decision.

A statement from the agencies sad: “The CMA’s statement does not reflect a thorough understanding of the market for modelling agencies in the UK, notably the role which agencies play in protecting the interests of models.

“The Agencies did not collude with the aim of forcing up or fixing prices to the detriment of consumers, acting instead to protect the interests of models and also ensure a sustainable market which benefits customers, the economy and society.”

Readers' comments (1)

  • The claim by the modelling agencies the subject of the CMA’s decision that,

    “The Agencies did not collude with the aim of forcing up or fixing prices to the detriment of consumers, acting instead to protect the interests of models and also ensure a sustainable market which benefits customers, the economy and society.”

    is understandable. It is one of the few ways in which the fixing of prices may be lawful. But even so, it can be a difficult argument to sustain as it depends at least partly on there being no other way to achieving the same result of benefiting consumers.

    Irrespective of this, the question now is whether the CMA will use this decision to look further into the fashion industry in order to determine whether other infringements of competition law are occurring.

    Stephen Sidkin
    Fox Williams LLP

    Unsuitable or offensive? Report this comment

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