This is the second fine relating to the price fixing of football merchandise that the CMA has imposed in the past 12 months. In September 2022, Elite Sports, JD Sports and Rangers FC (Rangers) were fined a total of over £2 million for fixing the retail prices of a number of Rangers-branded replica kits and other clothing products.
In this briefing, we highlight some of the key practical takeaways from these two decisions, the relevance of which extends far beyond the world of sport.
What did the CMA find?
In relation to the sale of Leicester City-branded clothing, the CMA believes that the parties entered into market sharing and price fixing arrangements for the 2018 to 2021 football seasons, under which JD Sports agreed to stop selling Leicester City-branded clothing online or alter its terms of online sales by requiring fans to pay for delivery charges on the goods in question (so as not to undercut Leicester City).
Leicester City admitted to participating in the alleged infringement, so benefitted from a settlement discount (the fine of £880,000 includes the discount).
JD Sports reported the alleged infringement under the CMA’s leniency policy, so benefitted from full immunity from any fine (provided that it continues to cooperate and complies with the other conditions of the CMA’s leniency policy).
In relation to the sale of Rangers-branded clothing, the CMA found that Elite Sports, JD Sports and Rangers colluded to stop JD Sports undercutting the retail price of the shirt on Elite’s Gers Online store.
As in the more recent case, the parties admitted to acting illegally and benefitted from a settlement discount. Elite Sports’ and JD Sports’ also benefitted from a fining discount under the CMA’s leniency programme.
Wider significance of these cases
This is not the first CMA decision of this kind. In 2003, the then Office of Fair Trading found that a number of sportswear retailers, Manchester United plc, the Football Association Ltd and Umbro Holdings Ltd had entered into price-fixing agreements in relation to replica football kit. The OFT’s decision was substantially upheld on appeal to the Competition Appeal Tribunal.
The CMA (like its predecessors) considers that agreements between undertakings that fix prices are among the most serious infringements of competition law.
There is a wider effort by the CMA to crack down on cartel activity. In June, the CMA announced that it has more than doubled its maximum reward for informants who “blow the whistle” on cartel activity (we discuss this in more detail in this article here).
Price fixing and anti-competition collusion can take a variety of forms, so it is important for businesses to be aware of this and know what to do if they suspect such behaviour, and to keep the substance and communication of their competition compliance policies under regular review.
Given these two cases, other sports clubs and businesses that they deal with should be especially alert at this time. However, they serve as an important reminder for all types of businesses in every sector of the economy.
Competition law specialists at Mills & Reeve are able to advise sports clubs on the wide range of potential competition issues with which they should be familiar and ensuring full compliance.
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