The CMA has imposed fines totalling £1,533,500 on 5 UK model agencies and their trade association for breaking competition law by colluding on prices.
The Competition and Markets Authority (CMA) has found that the agencies and their trade association, the Association of Model Agents (AMA), colluded instead of competing on prices for modelling services. This took place from at least April 2013 until March 2015.
UK Model Agencies fined for breaking competition law:
FM Model Agency fine of £251,000
Models 1 (Models One) fine of £394,000
Premier Model Management fine of £150,000
Storm Model Management fine of £491,000
Viva Model Management fine of £245,000
Association of Model Agents (AMA) fine of £2,500
How UK Model Agencies colluded
According to the CMA, 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 on a common approach to pricing.
How Association of Model Agents manipulated its members
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 CMA’s investigation concerned a wide range of modelling assignments – from fashion magazine shoots offering model fees of a few hundred pounds to advertising campaigns offering over £10,000. The conduct did not, however, extend to the services of so-called ‘top models’.
The conduct occurred in the context of negotiations with a range of customers, including well-known high-street chains, online fashion retailers, and consumer goods brands.
John Wotton, Chair of the Case Decision Group responsible for making the decision, said:
“Strong competition benefits consumers, the economy, and society. When businesses collude rather than compete the ultimate losers are customers. In this case, the agencies and the AMA colluded with each other over their approach to pricing and, in some instances, the agencies agreed to fix minimum prices. This type of behaviour harms the economy and deprives businesses and consumers of the benefits of competition.”
Anyone who has information about a cartel is encouraged to call the CMA cartels hotline on 020 3738 6888 or email [email protected].