Some of the world's top modelling agencies were hit Thursday with a 2.4 million euro fine (2.7 million US dollars ) for price fixing by French competition authorities.
Elite, IMG and Next -- who have some of the biggest catwalk stars including Gigi Hadid, Kate Moss and Karlie Kloss on their books -- actively "distorted the basis for commercial negotiations and created obstacles to competition to the detriment of their clients", the French competition watchdog said.
The swingeing fines, coming in the middle of Paris fashion week, hit almost every agency involved in the French market. Almost 40 agencies in total were fined, with the heaviest sanction of 600,000 euros falling on the Marilyn Agency which represents Claudia Schiffer.
Authorities also accused the modelling agencies' French union, the Synam, of drawing up and effectively enforcing its pricing guides for photo shoots, media campaigns and fashion shows "with little or no room for negotiation". It also fined the organisation 50,000 euros.
The watchdog said that for a decade until 2010 Syam "was ambiguous as to the 'official' nature of these pricing schedules, which not only covered minimum salary, but also established the total price that clients were invoiced for modelling services. "Prices not only included the model's remuneration, but also the agency's margin," its statement added.
It also accused the agencies of holding meetings where they would discuss "the drawing up, distribution and application of the union pricing schedules". They also agreed on a ban on making public their own pricing schedules, it said.
The deal helped support price fixing, the watchdog added, "as demonstrated by statements made by several of the agencies: 'We charge the rates that everyone charges, namely the rates distributed by the Synam.'" At the end of the period the watchdog investigated, the worldwide turnover of the agencies involved was some 150 millions euros, the almost 100-page report concluded.
According to its findings, in 2015 the minimum rate to hire models for fashion shows and publicity campaigns was 91.80 euros for a rookie and 176.90 for a more experienced model. The model had to be paid at least 64 percent of the price paid to the agency by the client, it said.
Neither SYNAM nor several of the agencies mentioned in the report were willing to comment when contacted by AFP. (AFP)
Photos: Screenshot of Elite, Next and IMG websites