The UK's Competition and Markets Authority (CMA) has fined
five fashion modeling agencies and their trade association, the
Association of Model Agents (AMA), for colluding on prices for
modeling services in the fashion industry between 2013 and 2015.
Totaling £1.5 million (US$1.9 million), the fines follow
similar penalties imposed on modeling agencies by the French and
Italian authorities earlier this year.
The CMA found that leading agencies (Premier, Storm, Viva,
Models 1, and FM Models) systematically discussed prices and
exchanged information when negotiating fashion models' services
with high street chains, online retailers, and consumer brands. The
agencies colluded on prices for modeling jobs ranging from magazine
shoots worth a few hundred pounds to advertising campaigns for over
£10,000. At times the agencies also fixed minimum prices for
the models' services and agreed on pricing strategies among
themselves. The collusion did not extend to fees for top models,
who usually pay a lower commission to agencies on account of their
AMA participated in the cartel by encouraging its members to
resist lower prices. The association was found to have regularly
issued circulars known as "AMA Alerts" to its members
urging agencies to resist prices offered by clients that AMA
considered were too low.
In September 2016, France's Autorité de la
concurrence fined 37 agencies (representing almost the entire
market) and trade association SYNAM a total of €2.4 million
(US$2.5 million) after finding that SYNAM distributed pricing
schedules for agencies to use as a point of reference in
negotiations with clients. These schedules included minimum
salaries for models as well as suggested commissions. The
Autorité found that during Paris Fashion Week the prices
were usually systematically applied to clients.
In November, the Italian Autorità Garante della
Concorrenza e del Mercato fined eight modelling agencies
(representing 80% of the market) and their trade association
(Associazione Servizi Moda or Assem) at total of €4.5
million (US$4.7 million) for coordinating prices relating to
models' salaries, transfer costs, image rights and agency
commissions between 2007 and 2015, after leading agency IMG
successfully filed for immunity. Assem played an instrumental role
in the coordination, by requiring final customers not to directly
contact the agencies but to address their requests to Assem.
Moreover, the meetings among agencies within Assem's context
were used for agreeing on common commercial conduct. Customers
targeted were primarily fashion houses and magazines participating
in the Milan fashion weeks.
Although the CMA's case was separate from those in France
and Italy, the three agencies exchanged information to assist in
understanding the sector and typical pricing conduct.
Within Europe in particular, an investigation in one EU member
state can trigger another member state's interest in a
particular sector and subsequent investigations. The national
competition agencies communicate regularly and systematically with
one another about their cases, and the modeling sector is the
latest example of this. It may well be the case that further
investigations into the modeling industry follow in other EU
jurisdictions. The investigations serve as a reminder that trade
associations can – deliberately or inadvertently –
become implicated in unlawful price fixing by its members and that
the association itself can be fined for conduct such as encouraging
a particular pricing strategy among its members or offering a
platform for the exchange of information between competitors.
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The UK Competition and Markets Authority ("CMA") has a duty to refer a transaction for an "in depth" phase 2 investigation in instances where it believes that there is a realistic prospect of a transaction resulting in a "substantial lessening of competition", subject to certain exceptions.
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