On 29 September 2016, the French Competition Authority (“FCA”), issued a fine condemning a price-fixing scheme in the French modelling industry.
This anti-competitive practice was aimed at coordinating prices throughout the modelling industry though the main professional modelling union, SYNAM. Through SYNAM, the agencies distributed pricing schedules which were then applied by virtually all the French modelling agencies.
From 2000 to 2010, the annual pricing schedules were drawn up and distributed every January to union members shortly after the annual sector negotiations on the model’s minimum wages. The FCA found that the exact nature of the pricing schedules, whether “official” or not, was kept ambiguous. Also, the pricing schedules covered not only the model’s minimum wages, but also established the total price that clients were invoiced for modelling services, including the agency's margin. The prices as a result could go as high as three times the model’s minimum wage. The prices were thus maintained at an artificially high level, at the expense of the modelling agencies’ clients.
Moreover, the FCA found that 37 modelling agencies in 2009 and 2010 had participated in meetings during which they decided on an increase of those prices set out in the SYNAM pricing schedules and agreed not to use pricing schedules other than the SYNAM schedules. The pricing schedules were then used as a reference for negotiations with clients. In some instances, such as during the Paris Fashion Weeks, there was no negotiation whatsoever: the prices were imposed on the modelling agencies’ clients.
Accordingly, the FCA issued a fine against those modelling agencies for distorting the basis for commercial negotiations with their clients and for participating in competition violations at the expense of their clients.
The FCA issued a total of € 2,381,000 in penalties to the SYNAM and the 37 modelling agencies.
The FCA nevertheless took into consideration that 3 participant modelling agencies, which did not challenge the facts, are undergoing financial difficulties and, accordingly, reduced the amount of theoretical fines for these agencies by 10%.