Sports goods retail sector: Chapter I investigation into anti-competitive practices

Office of Fair Trading (OFT) closed Competition Act 1998 case.

From:
Competition and Markets Authority
Published
17 October 2011
Case type:
CA98 and civil cartels
Case state:
Closed
Market sector:
Retail and wholesale
Outcome:
CA98 - no grounds for action
Opened:
1 September 2009
Closed:
17 October 2011

Case reference: CE/9088/09

Parties

JJB Sports PLC ('JJB') and Sports Direct International PLC ('SDI')

Issue

Whether the parties have participated in an agreement or agreements and/or concerted practice or practices with the object or effect of restricting competition within the sports goods retail industry.

Relevant Provisions

Article 101 of the Treaty on the Functioning of the European Union, and Chapter I of the Competition Act 1998.

Case closure summary 

  1. In September 2009, following the receipt of information from a leniency applicant JJB, (see note 1) the OFT opened an investigation into a suspected breach of Article 101 of the Treaty on the Functioning of the European Union and/or Chapter I of the Competition Act 1998 in the sports goods retail industry. The leniency application related to a suspected broad-ranging agreement or concerted practice between JJB and SDI allegedly aimed at dampening competition in the sports goods retail industry.
  2. As a result of the emerging evidence, the investigation became focused on suspected price fixing in respect of a variety of sports goods and suspected market sharing (by means of coordination as to the location of the parties' respective stores).
  3. Following a thorough assessment of the evidence it has gathered to date, the OFT has reviewed the case in light of its prioritisation principles. As a result, the OFT has decided to close the case. 
  4. In reaching this decision, the OFT has taken into account a range of relevant factors, consistent with its prioritisation principles. In particular, the OFT has to date uncovered only limited evidence of potential price fixing, much of which is contradicted by other material.  It has therefore concluded that the likelihood of being able to determine whether or not there has been an infringement is currently too low to merit prioritisation.
  5. Further investigation would also be required to determine whether or not there has been an infringement in relation to the location of the parties' stores. The OFT has concluded that this is not merited at the present time. In arriving at its decision, the OFT has taken into account the likely consumer impact of a case focused solely on store coordination, as well as its strategic significance. The evidence so far uncovered by the investigation suggests that any coordination with respect to store locations may have affected only a relatively limited number of stores for a relatively limited period or periods.
  6. In reaching its decision, the OFT has also taken into account the resources that would be involved in pursuing this investigation in the context of the resource requirements of other investigations it already has open or may open in the future.
  7. The OFT has not reached a view on whether or not the parties have infringed competition law in relation to the store locations or price fixing.  Considerable additional work would be needed before it would be in a position to make any such determination. 
  8. The decision to close this investigation on prioritisation grounds does not, in any circumstances, amount to a statement that either party has acted illegally or has infringed the Chapter I prohibition or Article 101 and nor should any such conclusions be inferred from this closure decision.  Nor does it prevent the OFT from deciding to re-open its investigation in the light of new information or a change of circumstances.
  9. Following its investigation, the OFT has drawn the parties' attention to the guidance it has recently published about how companies can ensure compliance with competition law. 
  10. The OFT's prioritisation decisions involve consideration of a range of factors. No conclusions should be drawn from the present case as to the likelihood of the OFT prioritising other current or future cases.

Note 1: JJB announced on 10 September 2009 that it had applied to the OFT for leniency and had been granted a Type A marker by the OFT under its leniency programme.

Published 17 October 2011

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