Leicester City FC to be fined for anti-competitive deal with JD Sports

5th Jul 2023 12:25

(Sharecast News) - The Competition and Markets Authority (CMA) issued a fine to Leicester City FC on Wednesday, after finding that the football club and retailer JD Sports had engaged in an arrangement that restricted competition in the sales of Leicester City-branded clothing, including replica kits.

It said Leicester City FC, along with its parent companies, acknowledged its participation in the anti-competitive arrangement.

Under the settlement, it had agreed to pay a fine with a maximum penalty of £0.88m, with the fine to include a settlement discount as a result of Leicester City FC's admission of guilt and their assistance in expediting the resolution of the CMA's investigation.

The regulator said JD Sports, on discovering the illicit conduct, promptly reported the matter and admitted its involvement in the alleged arrangement through a leniency application.

As a result, JD Sports would not face any financial penalties as long as it continued to cooperate with the CMA and meet all other conditions set out in the leniency policy.

The CMA said the case revolved around the specific terms of the arrangement between Leicester City FC and JD Sports.

In August 2018, JD Sports agreed to halt the online sale of Leicester City-branded clothing for the 2018-2019 season.

Additionally, in January 2019, JD Sports committed to not undercutting Leicester City's online sales for the 2019-2020 season by imposing a delivery charge on all orders of Leicester City-branded clothing, contrary to the company-wide promotion of free online delivery for orders over £70.

The pattern continued, as JD Sports maintained the delivery charges on online orders of Leicester City-branded clothing for the 2020-2021 season, lasting until at least 26 January 2021.

"Strong and unimpeded competition between retailers is essential to consumers' ability to shop around for the best deals," said the CMA's executive director of enforcement, Michael Grenfell.

"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."

Grenfell said both parties had now admitted their involvement, allowing the regulator 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."

At 1326 BST, shares in JD Sports Fashion were down 0.71% at 146.65p.

Reporting by Josh White for Sharecast.com.