Britain’s Competition and Markets Authority accused five of the country’s biggest modelling agencies of actions tantamount to market manipulation &mdash collusion and price fixing.
The CMA said in a statement that FM Models, Models 1, Premier, Storm and Viva, agreed “a common approach to pricing,” through the exchange of “confidential, competitively sensitive information, including future pricing information.”
This comes after a series of raids on the agencies’ offices in August.
Storm has models such as Kate Moss and Jourdan Dunn on their books, as well as model-turned-actress Cara Delevingne up until last year.
>Meanwhile Premier has looked after Naomi Campbell and Cindy Crawford.
None of the agencies have issued a public statement yet regarding the CMA review. Models 1, Premier, Storm and Viva were not immediately available for comment when Business Insider contacted the groups for a response.
However, FM Models went into liquidation in January this year and is no longer in business.
The CMA also alleges that the Association of Model Agents (AMA) was involved in the market manipulation by playing “an important role” in the price fixing claims. According to the regulator, AMA sent out emails called “AMA Alerts” which were allegedly “encouraging model agencies to reject the fees being offered by specific customers and to negotiate a higher fee.”
Stephen Blake, Senior Director of the CMA‘s Cartels and Criminal Group issued the following statement (emphasis ours):
“The allegations concern prices charged to a range of customers, including high street chains, online fashion retailers and consumer goods brands. The CMA alleges that these five model agencies sought to achieve higher prices in negotiations with their customers by colluding instead of competing.”
“This is the first competition enforcement case taken forward by the CMA in the creative industries, which are an important part of the UK economy. It shows the CMA‘s commitment to pursuing allegations that competition law has been broken in all sectors of the economy. Vigorous competition between businesses has benefits for customers and for the economy, keeping prices down and encouraging businesses to improve quality and be more efficient.
“These are provisional findings only and no conclusion can be drawn at this stage that there has been a breach of competition law. We will carefully consider any representations from the parties before deciding whether the law has been broken.”
If the CMA finds wrongdoing, it can fine the agencies up to 10% of worldwide revenue.