01 April 2015

Competition investigation into arrangements in the UK clothing, footwear and fashion sector

The UK’s Competition and Markets Authority (CMA) has recently launched a competition investigation into alleged anticompetitive arrangements in the clothing, footwear and fashion sector. 

The investigation is being conducted under Article 101 TFEU, which forbids anticompetitive agreements and concerted practices, and its UK equivalent, Chapter I of the Competition Act 1998. The CMA has not disclosed any further details about the scope of the case at this stage.

The case was opened last week, and the CMA states that initial investigations will take place between now and September 2015. We therefore expect that fact finding questionnaires will start to be issued in the coming weeks. 

The CMA has extensive fact finding powers and, since April 2014, has the power to impose financial penalties on companies that fail to comply with formal requests for information. It also has a new power to require individuals to submit to interviews by CMA officials.

A decision on whether to continue or drop this case is expected to be made in October. Ultimately, if a breach of competition law is established, companies can be fined up to 10% of their worldwide turnover for involvement in anti-competitive agreements or arrangements.

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