Penalties reduced for 5 modelling agencies fined for illegal price-fixing
AsiaOne
Monday, Apr 22, 2013
SINGAPORE - Five out of the 11 Singapore modelling agencies found guilty of illegal price-fixing activities in 2011 had their penalties reduced after an appeal to Competition Commission of Singapore (CCS).
An investigation was launched in 2009 when a complaint raised suspicions that the 11 agencies were collectively raising rates for various modelling services, in breach of the Competition Act.
In the course of investigations, the modelling agencies had characterised their actions as price guidelines issued by a trade association known as the Association of Modelling Industry Professionals (AMIP).
However, CCS found out that the AMIP was essentially a 'front' for its individual members, namely the agencies, to coordinate on and collectively raise rates for modelling services in Singapore.
The agencies had fixed rates on a wide variety of modelling services, including editorials, advertorials, fashion shows and media loading usage.
Customers who were impacted included publishers, photographers, show choreographers, show organisers and fashion labels.
The Competition Appeal Board (CAB) noted that price-fixing is regarded as one of the most serious forms of infringement of competition law.
Five of the 11 modelling agencies appealed to the CAB seeking a substantial reduction in financial penalties, but did not dispute that they had infringed the Competition Act.
After hearing the appeals, CAB dismissed most of their grounds of appeal save in two instances where the CAB held that the involvement of the directors, managers and proprietors was not an aggravating factor in the present case.
In its decision, CAB took into account that a large part of the turnover of the modelling agencies was paid to the models and consequently they received a low margin.
It also decided not to impose an additional penalty for the involvement of senior management based on the facts of the case.
The CAB ordered that the penalties of the five modelling agencies be adjusted from $291,067 to $243,077 in view of these considerations, and for the parties to bear their own legal costs.
The agency that received the largest penalty reduction was Ave Management, which had its penalty reduced from $132,315 to $110,262.
CCS Assistant Chief Executive Mr Toh Han Li warned that "companies should remain alert to avoid illegal anti-competitive practices, and train their staff to comply with competition law.
"Trade and industry associations should take care not to allow themselves to be used as a front for their members to engage in price-fixing or other anti-competitive practices," he said.
He also advised all parties faced with such situations in the future to clearly and publicly dissociate themselves from any price-fixing discussions and to report such conduct to CCS immediately.
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