Model Agencies Accused Of Price Collusion

Five top UK model agencies have been accused of colluding to fix prices, in a move the competition watchdog said may have raised high street fashion prices.

The Competition and Markets Authority (CMA), which carried out a series of raids on offices last year, said the agencies could face fines of up to 10% of their turnover if its preliminary findings are confirmed.

It (Other OTC: ITGL - news) alleged that Models 1, Premier - which launched Naomi Campbell's career, FM Models, Storm - which discovered Kate Moss - and Viva agreed a "common approach to pricing" between April 2013 and March 2015 for rates charged to high street retailers, online fashion firms and consumer goods brands.

The CMA also accused the Association of Model Agents (AMA) trade body of playing a key role through emails which allegedly encouraged agencies to reject fees being offered by specific customers and to negotiate a higher fee.

Stephen Blake, senior director of the CMA's cartels and criminals group, said: "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".

The regulator said collusion on higher charges would ultimately be borne by shoppers as agency customers would have likely moved to offset the increase in fees by raising their own prices.

None of the agencies are yet to comment on the allegations but it is understood at least two would face potential penalties of more than £1m under the CMA's regime.