On 18th March 2015, the Italian Competition Authority (the “ICA”) opened an in-depth investigation into eight companies (the “Accused Companies”) operating in the model agency services along with the Italian association who represents them (“Assem”) for alleged infringements of Article 101 TFEU, the prohibition of anti-competitive agreements.
The investigation started after the filing of an application for the ICA leniency program by one of the companies providing model agency services and involved in the alleged anti-competitive practice.
The information provided to the ICA allegedly shows that the Accused Companies shared between 2010 and 2014, prices charged to businesses requiring the modelling services, discounts applied to clients and the status of the negotiation relating to specific tenders.
The Accused Companies allegedly had the opportunity to share the aforementioned information during the frequent meetings held by Assem, the body which promotes the professional interests of all the affiliated companies.
The ICA believes that the coordination of commercial policies among the Accused Companies and the meetings held by Assem over a four-year period affected competition in the market of model agency services.
Through this behaviour, the ICA asserts that the Accused Companies sustained far lower costs then they would have borne by competing and were able to charge higher prices. These higher prices caused damage to both models working for the agencies and clients seeking modelling services.
It is worth mentioning that the ICA has decided to investigate a breach of Article 101 of the TFEU and not the equivalent Italian legislative provision because -- as the market of model agency services has been deemed national -- Italy is an important part of the European Union market and therefore the alleged behaviour in question could have had EU wide consequences.
The ICA has increased its focus on the fashion sector following investigations started by other National Competition Authorities like the Competition and Markets Authorities in the United Kingdom.
If wrongdoing is found, the ICA investigation and subsequent enforcement action could be considered a high profile deterrent against concerted practices in this sector. However, the alleged wrongdoing is not proven at this stage and the investigation continues.