JD Sports and Footasylum fined for breach of CMA order

British sportswear retailers JD Sports and Footasylum have been fined a combined 4.7 million pounds for breaching an order by the UK’s Competition and Markets Authority (CMA).

The CMA, which in November ordered JD Sports to sell Footasylum over competition concerns, said the CEOs of the two companies breached its order by sharing “commercially sensitive information”.

It said the bosses also failed to report the breaches, which “significantly impacted the CMA’s ability to act swiftly to stop the information from being shared further”.

The watchdog said the failure to have proper safeguards in place made breaches “almost inevitable”.

JD Sports bought Footasylum for 90 million pounds in 2019.

But that same year, the CMA began investigating the acquisition, and in November last year ordered JD Sports to sell Footasylum’s 65 stores after ruling the merger between the two sportswear retailers would “leave shoppers worse off”.

That same month, the Sunday Times reported that JD Sports’ executive chairman Peter Cowgill and Footasylum CEO Barry Brown breached the CMA’s order by meeting in a Bury car park.

‘Crucial details’ missing

Kip Meek, chair of the inquiry group investigating the merger, said: “There is a black hole when it comes to the meetings held between Footasylum and JD Sports.”

He said the CEOs couldn’t recall “crucial details” about the meeting and there were no email or phone records, some of which had been deleted before they could be given to the CMA.

“Had there been proper safeguards in place, we would have been alerted to these breaches in good time and would have had the necessary information to tackle them head-on,” Meek said.

He continued: “It jeopardised our ability to maintain the benefits of a competitive market for shoppers and ensure there is a level playing field for other businesses. This fine should act as a warning - if you break the rules there will be serious consequences.”

Responding to the news, JD Sports said: “At no point has there been any intention to breach the rules although JD” but it did accept that it, “inadvertently, it was in receipt of limited commercially sensitive information and that this was not reported to the CMA immediately”.

But it said some claims by the CMA “are either incorrect or have been presented in a misleading manner through the use of inflammatory language”.

The company said it “absolutely refutes any allegation that this was due to records being deliberately deleted”, but said it accepts “that some phone records were not available”.