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CMA publishes open letter to creative industries

The Competition and Markets Authority (CMA) has published an open letter to businesses operating in creative industries reminding them of the risks of breaching competition law.

The letter highlights the recent case where five leading model agencies (FM Models, Models 1, Premier, Storm and Viva) and their trade association were fined over £1.5 million for coordinating the prices they charged for modelling services. The model agencies regularly and systematically exchanged confidential and commercially sensitive information and discussed prices in the context of negotiations with particular customers.

How does this affect you?

The case once again underlines the risks of competitors exchanging sensitive information and commenting on each other's pricing practices. In particular it highlights the role that trade associations can play in facilitating illegal co-operation and exchange of information between market competitors.

The Association of Model Agents (AMA) provided a platform for rival model agencies to exchange sensitive information through email circulars known as 'AMA Alerts'.

Some examples of the illegal statements made through the AMA Alerts (including by the AMA itself) include:

  • urging competitors to resist prices that are particularly low;
  • commenting that a price accepted by a competitor is lower than the price that customer has accepted in the past; and
  • suggesting that competitors need to work together to stop prices getting too low.

The practices highlighted a gap in knowledge and understanding of competition law amongst certain businesses in the sector.

All businesses should ensure that they have clear internal policies in place to ensure that its employees do not discuss pricing with the representatives of its competitors. If your business is an active participant of a trade association, it is important that any employees who engage with that association understand your policies and the risks associated with breaching competition rules.

How can we help?

TLT's Competition team has extensive experience advising trade associations and their members on the competition risks associated with collusion and information exchange.

If you are not sure what kind of information competitors can and cannot discuss, TLT Competition team can help you understand where to draw the line and formulate internal policies that are clear and easy for all employees to understand.

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