On 26 October 2017, the UK Competition and Markets Authority ('CMA') published its decision to accept binding commitments offered by the Showmen's Guild of Great Britain (the 'Guild') in relation to certain of its rules (the 'Decision').
Background
The Guild is an association which "protects" travelling showmen. The CMA estimates that around 90 per cent of active showmen in the UK are members of the Guild, and that around 90 per cent of fairs in the UK are organised by one of its members.
Following a complaint received by the Office of Fair Trading (the CMA's predecessor) in December 2013, the CMA launched a formal competition investigation in December 2015, and issued a Statement of Objections on 21 December 2016. This set out the CMA's provisional view that certain of the Guild's rules constitute a decision by an association of undertakings (i.e. showmen who are actual or potential competitors at various fairs in the UK) which may infringe Chapter I of the Competition Act 1998.
Competition concerns
The CMA identified potential competition concerns in respect of a number of the Guild's rules, including those relating to membership applications and rules prohibiting Guild members letting ground at fairs to non-members.
It considered these rules to be restrictive of competition both (i) at existing Guild fairs, and (ii) between Guild fairs and rival fairs. The Decision notes that the rules protect incumbent Guild members and their fairs from competition thereby reducing choice and innovation.
Commitments
To address these concerns, the Guild offered formal commitments to amend the restrictive rules by no later than 31 January 2018. These changes include:
- ensuring membership applications are based on objective criteria, including a right to appeal;
- reducing restrictions on Guild members taking ground from non-member showmen;
- reducing restrictions on Guild members letting ground to non-members;
- making it easier for landowners to improve fairs by replacing poor-performing showmen; and
- reducing restrictions on rival fairs.
The Guild has also agreed to publish an up to date version of its rule book on its website from March 2018, to ensure transparency.
The CMA considers these commitments would remove or significantly reduce the restrictions faced by Guild-member and non-member showmen, and that they are capable of being implemented effectively within an appropriate time frame.
Other comments
The Decision sends a strong signal that the CMA does not tolerate trade associations adopting rules or practices that are aimed at shielding their members from competition.
With thanks to Danica Barley of Ashurst for her contribution.
All articles in the November edition of the Competition newsletter
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