A group of top model agencies has been accused of “colluding instead of competing” to fix prices.
The accusations were made in a “statement of objection” by the Competition and Markets Authority (CMA), the UK’s competition watchdog, as part of an inquiry launched last March.
Models 1, Premier, Storm, Viva and FM Models have all been accused by the CMA of exchanging sensitive information, such as future pricing, between April 2013 and March 2015.
The CMA also accuses the five companies in some instances of price fixing, where rival companies agree on a common approach to pricing.
As part of the inquiry the accused now have the opportunity to respond to the allegations made by the CMA before a final judgment is made.
The CMA also alleges that these five companies used the Association of Model Agents (AMA), an industry trade association, as a “vehicle for price coordination”.
According to the CMA, the AMA circulated regular emails “encouraging model agencies to reject the fees being offered by specific customers and to negotiate a higher fee”. As modeling agencies normally earn by taking a commission from a model’s fees, both the models and the agencies would have benefited from any increase in fees.
In a statement senior director of the CMA’s Cartels and Criminal Group Steven Blake said: “The CMA alleges that these five model agencies sought to achieve higher prices in negotiations with their customers by colluding instead of competing.”
In August last year the CMA raided the offices of the companies accused in order to seize information.
The CMA has the power to fine the companies up to 10% of their annual global turnover.
A spokesperson from Premier Model Management declined to comment. The other agencies and the AMA have not responded to requests for comment.