On 27 March 2017, the UK CMA took the final step in two cartel cases. The decisions illustrate some of the wide range of activities which are considered to be illegal cartel activity in the UK and the rest of the EU and can give rise to significant fines.
In the furniture parts case, the CMA issued two decisions formally finding three companies guilty of illegal cartel conduct and imposing fines totalling £2.8 million. This follows January’s announcement that Thomas Armstrong (Timber) and Hoffman Thornwood had agreed to pay fines totalling over £2.8 million after admitting market sharing, coordinating prices, bid-rigging and exchanging commercially sensitive information. Another company, BHK (UK), also confessed its involvement in cartel activity shortly after the start of the investigation, but was not fined as it was the first to come forward under the CMA’s leniency policy.
Separately, the CMA published the full text of its final decision in its case against five model agencies and their trade association, which were fined over £1.5 million. The CMA found that the agencies — FM Models, Models 1, Premier, Storm and Viva — and their trade association, the Association of Model Agents (AMA), colluded instead of competing on prices for modelling services.
The parties regularly and systematically exchanged information and discussed prices in the context of negotiations with particular customers. In some cases, the agencies agreed to fix minimum prices or agreed to a common approach to pricing. In addition, the AMA and the agencies sought to influence other AMA members by regularly issuing email circulars, known as “AMA Alerts,” urging AMA members to resist the prices offered by customers on the grounds they were too low.
The conduct occurred in the context of negotiations with a range of customers, including well-known high-street chains, online fashion retailers and consumer goods brands. These customers are no doubt now preparing follow-on private civil claims for damages.