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UK regulator warns creative industry businesses against colluding on price

Businesses operating in the creative industries in the UK have been warned that they face fines, criminal penalties, potential claims for damages and harm to their reputation if they coordinate their approach to pricing, including through trade associations.13 Sep 2017

The Competition and Markets Authority (CMA) issued an open letter (3-page / 287KB PDF) to the industry to highlight enforcement action it took last year in a case where five model agencies and their trade association were fined for what it said was a "serious violation of competition law". The letter was published ahead of London Fashion Week.

In that case, the CMA fined FM Models, Models 1, Premier, Storm and Viva and trade body the Association of Model Agents a total of more than £1.5 million after it found they had "regularly and systematically exchanged information and discussed prices in the context of negotiations with particular customers", and in some instances "agreed to fix minimum prices or agreed a common approach to pricing".

In his letter, Stephen Blake, senior director of cartels and criminal at the CMA, said: "The message from the model agencies case is clear: the CMA takes illegal price coordination and information sharing seriously and will investigate businesses in all industries – including those that operate in the creative sectors – if there are reasonable grounds to suspect the law is being broken."

The CMA said it wanted to highlight the case to the entire creative industries after research found that more than 50% of businesses in the sector said they did not know competition law well, if at all.

The regulator said businesses should train staff so that they "know what they can and can’t do, including the sorts of things which they should not discuss with competitors", and highlighted existing guidance and case studies that can help inform their behaviour. It also advised businesses to notify it if they believe they have engaged in an illegal cartel.

"The creative industries are hugely important to the UK economy, and healthy competition ensures it stays that way," Blake said.