Penalties totalling $85,000 were imposed in the Federal Court on Thursday on four prominent model agencies, and one director from each agency and one former employee at one agency, for price-fixing in breach of section 45 of the Trade Practices Act 1974.
The Australian Competition and Consumer Commission had alleged that Chadwick’s Model Agency Pty Limited, Vivien’s Model and Theatrical Management, Gordon Charles Management Pty Limited and Priscilla’s Model Management Pty Limited made an arrangement either at, or shortly after, a meeting of the Model Agents & Managers Association Inc (MAMA) in May 1995.
The arrangement was to charge an Agency Service Fee, that is, a set percentage loading of the fee charged for the supply of the talent, to those clients who had not previously paid the fee. Some of the customers of the agents, including advertising agencies, had previously refused to pay the Agency Service Fee.
The Court accepted joint submissions between the ACCC and each of the respondents regarding injunctions and penalties for breaches of the Act. The joint submissions took into account factors including that consumers had not suffered significant damage as a result of the conduct and that each of the respondents had admitted that their actions were in breach of the Act, saving the Court and the ACCC both time and expense.
The arrangement had been motivated by a desire by the agencies to have all of their customers pay the Agency Service Fee.
The Court imposed penalties, which had been jointly submitted by the ACCC and the parties, of the following:
| Penalty | Agency | Penalty | Director or Employee |
|---|---|---|---|
| $20,000 | Chadwick’s Model Agency Pty Ltd | $10,000 | Peter Chadwick |
| $20,000 | Vivien’s Model & Theatrical Management | $5,000 | Kevin Smith |
| $10,000 | Priscilla’s Model Management Pty Ltd | $4,000 | Priscilla Leighton-Clark |
| $1,000 | Gary Saunders | ||
| $10,000 | Gordon Charles Management Pty Ltd | $5,000 | Gordon Charles Donald |
"There is no justification for resorting to price fixing," ACCC Chairman Professor Fels said today. "The ACCC cannot ignore cases of price-fixing, even if the perpetrators are smaller businesses. Small business has obligations as well as rights under the Trade Practices Act. These agencies accounted for the greater part of the market between them."
The ACCC also recognised the facilitating role that the industry organisation, the Model Agents & Managers Association Inc (MAMA), played in the conduct.
"While industry organisations can be individually beneficial and meetings of common interest can be pro-competitive, meetings of this nature must not be used as a means of reaching an understanding on prices or for organising any other anti-competitive conduct," Professor Fels said. "Price fixing has been deemed by Parliament as inherently anti-competitive, a message which is reinforced by the potential for maximum penalties of $10 million dollars for corporations, and $500,000 for individuals, for a breach of this part of the Act."