The Competition and Markets Authority (CMA) has opened an investigation into whether arrangements in the UK clothing, footwear and fashion sector breach Chapter I of the Competition Act and/or Article 101 of the EU Treaty.
Broadly speaking, Chapter I and Article 101 prohibit agreements which have the object or effect of preventing, restricting or distorting competition in a market.
The CMA commenced its initial investigation on 24 March 2015 and will make a decision around October 2015 whether to proceed to an in-depth investigation or close the file.
The initial investigation will involve an information gathering phase, including issuing formal information requests to the parties involved.
In a statement published on its website last week, the CMA stated “this case is at an early stage and no assumption should be made that there has been an infringement of competition law.”
The fashion sector has also come under scrutiny from the ACCC in recent times.
In 2012, the ACCC commenced an investigation into arrangements between clothing importers and international suppliers, after receiving complaints that some local distributors and retailers had been entering into agreements with their suppliers to stop selling their products to Australians on overseas websites, or increase the prices paid by Australian consumers online.