LONDON — The five model agencies fined for price-fixing by the U.K. Competition and Markets Authority on Friday have denied the allegations and said they will appeal the regulator’s decision.
The CMA has imposed a 1.5 million pounds, or $1.8 million, fine on Storm, Viva, Models 1, Premier and the Squad model agencies in London, as well as their trade group, the Association of Model Agents. According to the regulator, the agencies have been agreeing on a common approach when it came to pricing for fashion shoots or advertising campaigns for clients including high-street chains, fashion retailers and designer brands throughout the period from April 2013 to March 2015.
Andy Mills, a spokesperson for Models 1, Premier and Storm, said the CMA’s findings are “wholly mistaken” and not reflective of “a thorough understanding of the market for modeling agencies in the U.K., notably the role which agencies play in protecting the interests of models.”
Mills added that there is a lack of evidence in the findings and no ground in the allegations of misconduct, which were related to the alerts sent to members of the Association of Model Agents earlier this year. The alerts aimed to address inappropriate contract terms related to image rights and help members deal with the issue of image usage, which has been increasing with the rise of online retailing.
Mills also made reference to a number of complexities in the modeling industry to demonstrate that price-fixing could not have occurred under the current circumstances, such as the gap between the fees for models entering the industry and higher-paid established faces, and the variations in contracts depending on factors such as exclusivity, syndication and breadth of coverage. He added that there is a total of 58 agencies in the U.K., with the agencies under investigation only making up 15 percent of the British market share.
John Horner, managing director of Models 1, added that the level of fines imposed by the CMA is disproportionate: “We reached our decision to appeal the CMA’s findings without hesitation. It is clear that even after a 20-month investigation the CMA has failed to understand our complex industry. The disproportionate level of fines imposed is out of line with the CMA’s own guidance and penalties imposed in other, far more serious cases in France and Italy.”
Viva has also denied the accusations and the level of penalty imposed on the agency.
“Viva has not yet had an opportunity to study the CMA’s decision to establish how the CMA seeks to justify the level of penalties it has imposed. It will do so over the coming days and decide what action to take,” said the agency’s director, Natalie Hand.
“Viva strongly denies it agreed to fix minimum prices or that it agreed a common approach to pricing. To-date the CMA has produced no evidence to demonstrate that the conduct which is the subject of the CMA’s decision had any effect on the rates models represented by Viva received for assignments; this is because it did not have any such effect. The CMA has rushed to issue an infringement decision and in doing so, has mischaracterized a number of information exchanges as price-fixing and has imposed penalties which are grossly disproportionate in the circumstances.”