Former Premier League club Leicester City is to be fined up to £880,000 after “colluding to restrict competition” alongside JD Sports in the sales of club clothing, including replica kit, according to the UK competition watchdog.
The Competition and Markets Authority (CMA) said both the football club, which won the Premier League in the 2015-16 season but were relegated to the Championship last season, and JD Sports admitted to anti-competitive behaviour, which include “price fixing conduct”.
They broke competition law between 2018 and 2021 with deals restricting competition in the sale of club-branded clothing, a provisional investigation by the CMA concluded.
The club and its parent companies agreed the fine, the maximum amount for the offence. JD Sports has not been fined because it reported the unlawful activity and admitted its part.
The watchdog said that although the parent companies, King Power International and V&A Holding were fined it had no reason to believe the parent companies themselves were directly involved in the unlawful conduct.
In August 2018, JD Sports said it would stop selling Leicester-branded clothing online for the 2018/19 season, and in January 2019, JD Sports agreed it would “not undercut” the club in terms of online sales for the following season by applying a delivery charge to all orders, the CMA said.
It said JD Sports continued the agreement to sell all Leicester City clothing with the charge until at least January 2021.
Football clubs have faced mounting criticism about their exploitation of fans around expensive replica kits and other memoribilia.
Michael Grenfell, the CMA’s enforcement at the CMA, said: “Strong and unimpeded competition between retailers is essential to consumers’ ability to shop around for the best deals.
“Football fans are well-known for their loyalty towards their teams. In this case we have provisionally found that Leicester City FC and JD Sports colluded to share out markets and fix prices with the result that fans may have ended up paying more than they would otherwise have done.
“Both parties have now admitted their involvement, allowing us to bring the investigation to a swift conclusion.
“The fine that Leicester City FC and its parent companies have agreed to pay sends a clear message to them and other businesses that anti-competitive collusion will not be tolerated.”
A previous investigation by the CMA found that JD Sports, together with Elite Sports, broke competition law by fixing the retail prices of a number of Glasgow Rangers-branded replica kits and other clothing products from September 2018 to July 2019. JD Sports were fined £1.4m.
The football club, nicknamed The Foxes, said: “LCFC has cooperated fully with the CMA’s investigation, which related to the supply of limited volumes of replica kit and other branded clothing to JD Sports for resale over the course of two and a half seasons (2018/19, 2019/20 and the first half of the 2020/21 season). No current Club directors or senior management were involved in the arrangements with JD Sports.
“These arrangements related to a limited number of bulk orders by JD Sports, which were accepted by the Club’s retail sales team over the relevant period. There was no intention on the part of the Club to unlawfully restrict the resale of the goods supplied and no material financial advantage to be gained from doing so, given the limited amount of kit supplied to JD Sports.
“However, the Club accepts the CMA’s findings and has taken steps to strengthen its training and compliance measures to ensure the Club’s retail operations fully comply with competition law.”
