Model agencies fined £1.5m over price fixing

Some of Britain's best-known model agencies have been slapped with fines totalling £1.5 million after the competition watchdog found they colluded to fix prices.

The Competition and Markets Authority (CMA) said FM Models, Models 1, Premier, Storm and Viva as well as trade body the Association of Model Agents (AMA) broke competition law by "regularly" and "systematically" exchanging information and in some cases agreeing to fix minimum pricing.

It said that the collusion affected 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."

The misconduct took place across a range of modelling assignments ranging from magazine fashion shoots where model fees were a few hundred pounds, to advertising campaigns charging more than £10,000.

The AMA was also found to have been influencing members to collude on prices, having sent regular emails urging agencies to reject the prices offered by customers "on the grounds that they were too low".

The investigation found that collusion took place at least from April 2013 to March 2015.

Penalties varied between the agencies. Trade body AMA received the smallest penalty at £2,500, while Storm was fined £491,000.

FM Models was charged £251,000, Premier was hit with £150,000, Models 1 was fined £394,000, and Viva was fined £245,000.

Agencies Models 1, Premier and Storm have said that the CMA's findings were "wholly mistaken" and are now planning to appeal against the decision.

"The CMA's statement does not reflect a thorough understanding of the market for modelling agencies in the UK, notably the role which agencies play in protecting the interests of models," the agencies' statement said.

"The agencies did not collude with the aim of forcing up or fixing prices to the detriment of consumers, acting instead to protect the interests of models and also ensure a sustainable market which benefits customers, the economy and society."

The agencies defended the AMA's emails, saying the alerts related mainly to image use rights, which have become more difficult to manage in the era of online retail and can have a "significant detrimental impact" on models' careers.

The CMA also failed to recognise "intense competition" across the industry, with more than 10,000 models and 58 agencies operating in the UK fashion market alone.

The statement said that the agencies affected by the decision have a market share of less than 15% and that actual modelling fees across the industry have fallen by 10% since 2011.

Models 1 managing director John Horner said: "The CMA is penalising modelling agencies for seeking to maintain professional standards within the industry whilst also protecting the interests of young and vulnerable people.

"They are not improving the competitive environment but are damaging a small but important UK industry which is recognised as successful internationally.

"The disproportionate level of fines imposed is out of line with the CMA's own guidance and penalties imposed in other, far more serious cases in France and Italy."

The CMA said price collusion did not extend to the services of "so-called 'top models'".