The Competition and Markets Authority (CMA) has been investigating the leisure industry as the funfair sector has allegedly breached competition laws under Chapter I of the Competition Act (CA).
The Chapter I prohibition bans agreements made between two or more companies that prevent, restrict or distort competition within the U.K. The result of such agreements is that markets can adversely suffer, and consumers can be left with higher prices and reduced innovation and quality.
Where the CMA suspects there are illegal agreements in place, they’ll often investigate the issues to stamp out any problems.
The types of agreements prohibited under Chapter I are quite wide. They include, but are not limited to:
| Agreements which directly or indirectly fix purchase or selling prices, or any other trading conditions (this may include discounts) |
| Agreements which limit or control production, markets, technical development or investment (this may include setting quotas) |
| Agreements which share markets or sources of supply |
| Agreements which apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage |
Impact on consumers
If the funfair industry are found to be engaging in any of these agreements, this may force higher prices in comparison to a competitive market. If higher prices are implemented in the market, this can have a negative effect on the consumer as they’re paying more than they should be doing.
In this case, the CMA alleged that Showmen’s Guild of Great Britain in the travelling fair sector breached competition law by imposing rules that can reduce new attractions joining fairs.
Unfair rules imposed?
Guild’s rules impose that members, who make up 90% of the travelling fairs sector in the U.K., aren’t allowed to compete with one another in attending fairs together. They’re also not allowed to start new fairs in a bid to compete with existing fairs.
There are huge concerns that these rules make it difficult for non-Guild members to attract amusements to their fairs as well as putting on other fairs to compete as these will be seen as a direct contravention to the Guild’s rules.
Where authorities/competitors try to alter the rules set out by Guild, “members can boycott the whole fair”. This happened in 2013 when Hoppings Fair in Newcastle didn’t go ahead as planned, leading to some 500,000 fair-goers missing out on the fun that year.
Progress of investigations
Since a statement of objections was issued in December 2016, there has been further progress with the investigation. A statement of objections is issued from the Commission setting out its concerns to the parties. From March to May 2017 there were written and oral representations on the statement of objections from the Guild. The CMA has from June to September 2017 to consider the Guild’s representations and to make a final decision on whether they have breached competition laws.