(Estimated reading time: 2 minutes 24 seconds)
We’re probably familiar with the term “match fixing”; when betting syndicates persuade key players in a cricket or football match to “fix” games for cash. We’re probably not so familiar with “price – fixing” in the context of football. In this article we take a look at what happened at the end of last year.
This came to the fore regarding the sale of Scottish Premier League side Rangers F.C’s replica football kits. The Competition and Markets Authority, the UK’s primary competition authority, imposed fines totalling over £2 million on Elite Sports, JD Sports and Rangers FC after they admitted fixing the prices of certain Rangers merchandise.
The fine is sizeable and intended (as with any fine) to act as a deterrence and to deter businesses from engaging in the same or similar anti-competitive activity. The maximum penalty allowed by statute is 10% of the worldwide turnover of the undertaking in its last business year.
Elite, JD Sports and Rangers colluded to fix the retail price of Rangers shirts and branded kits. Elite’s position was as the only wholesale supplier as well as the largest retailer of Rangers-branded clothing products during the period of the infringement. JD Sports’ position was as the only major retailer of Rangers branded clothing products. Rangers participated in the agreement and/or concerted practice to fix the retail price of its “RFC H18” shirt.
Competition is the lifeblood of a market economy and free and fair competition is essential for the operation of a level playing field. Just as fixing a football match is illegal and anti- competitive, so is an agreement to fix the price of merchandise sold to unsuspecting customers.
Price fixing cartels are of course not new and have been the subject of collective proceedings in the Competition Appeal Tribunal. The “trucks cartel” group action is a case in point following the European Commission’s 2016 infringement decision.
The Chapter 1 prohibition of the Competition Act 1998 (“Act”) prohibits agreements between undertakings, decisions by associations of undertakings and concerted practices, which may affect trade within the UK and have as their object or effect the prevention, restriction or distortion of competition within the UK.
The Chapter 1 prohibition applies, among other things, to agreements or concerted practices which “directly or indirectly fix purchase or selling prices or any other trading conditions”. Price-fixing agreements are, by their very nature, restrictive of competition.
Following the UK’s exit from the EU, the UK no longer has jurisdiction to apply Article 101 Treaty on the Functioning of the European Union (“TFEU”) which essentially mirrors that of Chapter 1 of the Act. However, EU case law applying Article 101 of the Treaty on the Functioning of the European Union remains relevant pursuant to section 60A of the Act.
If you would like more information on our ATE insurance and disbursement funding products for competition law litigation, or to discuss a case, please either email email@example.com or call him on 01483 514428.