{"id":485,"date":"2017-06-15T15:03:25","date_gmt":"2017-06-15T14:03:25","guid":{"rendered":"https:\/\/www.competitionlawyers.co.uk\/blog\/?p=485"},"modified":"2017-06-15T15:05:21","modified_gmt":"2017-06-15T14:05:21","slug":"several-top-model-agencies-fined-1-5-million-pounds-cma","status":"publish","type":"post","link":"https:\/\/www.competitionlawyers.co.uk\/blog\/several-top-model-agencies-fined-1-5-million-pounds-cma","title":{"rendered":"CMA issues \u00a31.5 million fine to several top model agencies"},"content":{"rendered":"

The Competition and Markets Authority (CMA) has ended investigations into several top model agencies and trade associations for anti-competitive behaviour.<\/p>\n

The following model agencies were fined back in December 2016:<\/p>\n

\n
    \n
  1. Storm: \u00a3491,000<\/strong><\/li>\n
  2. Models 1: \u00a3394,000<\/strong><\/li>\n
  3. Viva: \u00a3245,000<\/strong><\/li>\n
  4. FM Models: \u00a3251,000<\/strong> (now out of business)<\/li>\n
  5. Premier: \u00a3150,000<\/strong><\/li>\n<\/ol>\n<\/div>\n

    The Association of Model Agencies (AMA) was also fined \u00a32,500<\/strong>.
    \n<\/p>\n

    Guilty verdict<\/h2>\n

    They were found guilty of price collusion whereby agencies would liaise with each other, comparing prices and then rising prices so clients would be forced to pay higher prices.<\/p>\n

    The CMA published a non-confidential decision explaining the reasoning for their judgement. During their investigations they found that, as far back as 2001, the AMA would regularly send out memos to their members in regards to “fees and other terms and conditions being offered by a particular customer for a modelling assignment”.<\/p>\n

    This became the norm in the industry.<\/p>\n

    “Extensive and prolonged contacts between competitors”<\/h3>\n

    However, the memos weren’t the only contact between the modelling agencies and the AMA. There was an “extensive and prolonged contacts between competitors” discussing fees and terms of contracts; often stating proposed fees by customers were “not appropriate” and insufficient.<\/p>\n

    The modelling agencies would respond to the emailed alerts, and in one occasion, Storm made a suggestion on how much should be charged for a photo shoot as a minimum. When fees were deemed low, model agencies would try to persuade others to reject the job too. Together, the agencies would come to a consensus that certain fees proposed by prospective customers were too low and none would accept the job.<\/p>\n

    The customers would therefore be told that their proposed fees were too low and that none of the modelling agencies would take the job on. By doing this, the modelling agencies and their trade association could raise the fees for all involved.<\/p>\n

    CMA condemns their actions<\/h3>\n

    In a recent press release, the CMA condemned the actions of cartels coming together to manipulate pricing strategies in markets. This anti-competitive behaviour takes away the consumers right to look around in the market and choose a service or product at a competitive price, meaning customers are forced to pay higher prices.\u00a0Mr Stephen Blake, Senior Director for Cartels, stated that anti-competitive behaviour not only “cheats customers of the benefits of competition<\/em>” but also damages the wider economy.<\/p>\n

    Some of the agencies clients even involved large high street brands.<\/p>\n

    Wider platform to report suspicious activity<\/h3>\n

    In response, the CMA has thus launched a campaign that gives consumers and businesses alike a wider platform to report any activity they may suspect to be a cartel or any other form of anti-competitive behaviour.<\/p>\n

    An animated YouTube video explains how an individual can help to fight cartels. <\/p>\n