'Illegal anti-competitive collusion will not be tolerated': Rangers fined for their part in merch price-fixing

The regulator says that Rangers FC also took part in the collusion but only to the extent of fixing the retail price of adult home short-sleeved replica shirts from September 2018 to mid-November 2018.

In June, former Rangers chairman Dave King said he was "100 per cent certain" that Rangers would be cleared of any wrongdoing.

The regulator said that all three firms colluded to stop JD Sports undercutting the retail price of the shirt on Elite’s Gers Online store.

Elite Sports has been fined £459,000, JD Sports £1,485,000 and Rangers £225,000.

The consumer organisation Which welcomes Ofgem's action.

Lisa Webb, Which's consumer law expert, said: “Loyal football fans being exploited by some sports retailers and clubs is not new. Which? fought for fans to be compensated for kit price fixing 15 years ago, so it is frustrating that this unfair practice has happened again.

“It’s good to see the regulator taking strong action, with substantial fines for the guilty parties – sending a firm message that this behaviour is unacceptable and will not be tolerated."

The penalties include a settlement discount after the regulator said all three admitted to acting illegally and helped bring a "swifter resolution" to the CMA’s investigation.

Elite Sports’ and JD Sports’ penalties also include a discount for coming forward with information about their participation in the illegal conduct and cooperating with the investigation under the CMA’s Leniency Programme.

Michael Grenfell, executive director of forcement at the CMA, said: "At a time when many people are worried about the rising cost of living, it is important that football fans are able to benefit from competitively priced merchandise.

"Instead, Elite, JD Sports and, to some extent, Rangers, worked together to keep prices high.

"Today’s decision sends a clear message to football clubs and other businesses that illegal anti-competitive collusion will not be tolerated."

The CMA said at the time of the infringement, Elite was the manufacturer of Rangers-branded clothing and also sold Rangers-branded products directly through its Gers Online store and later in bricks-and-mortar shops in Glasgow and Belfast. The only UK-wide major retailer selling those products at the time was JD Sports.

The CMA’s investigation found that Rangers FC became concerned about the fact that, at the start of the 2018 to 2019 football season, JD Sports was selling the Rangers replica top at a lower price than Elite, which was seen at the time as the club’s ‘retail partner’.

This resulted in an understanding between the three that JD Sports would increase its retail price of the Rangers adult short-sleeved home replica shirt by nearly 10%, from £55 to £60, to bring it in line with the prices being charged by Elite on Gers Online.

The CMA also found that Elite and JD Sports – without involvement from Rangers – colluded to fix the retail prices of Rangers-branded clothing, including training wear and replica kit, over a longer period. This included aligning the level and timing of discounts towards the end of the football season in 2019, to avoid competition between them and protect their profit margins.

The Competition Act 1998 prohibits agreements and concerted practices between businesses which have as their object or effect the prevention, restriction or distortion of competition within the UK.

Any business found to have infringed the prohibitions in the Competition Act 1998 can be fined up to 10% of its annual worldwide group turnover.

In the summer the CMA had provisionally found that Elite Sports, JD Sports and Rangers breached competition law by fixing the retail prices of certain Rangers-branded clothing products over several months from September 2018.

In a statement at the time Rangers insisted they are 'committed to operating its business in full compliance with all laws, including competition law, and treats this matter very seriously' as they prepare their response to the CMA findings.

Mr King was a key protagonist in the lengthy battle with Sports Direct following regime change at Ibrox in 2015 and was chairman during the period where Rangers, JD and Elite have been accused of breaking regulations.

He said at the time: "I am 100 per cent certain that the Club was not complicit."

When asked if he had any knowledge of that agreement between JD and Elite, King said: "I was absolutely not aware and, due to the club’s prior embarrassments with retail, James Blair and I kept such a tight control over all commercial contracts that I don’t believe it was possible for Stewart (Robertson), or any other executive at the club, to enter into such an arrangement without my knowledge."

Earlier this year, Rangers  finally put an end to years of High Court battles with Mike Ashley and Sports Direct as an out-of-court settlement was reached.

A company in the Mike Ashley-founded Sports Direct Group, SDI Retail Services (SDIR), had been suing the Ibrox club for damages after successfully claiming Gers had breached an agreement with the sportswear firm over merchandise rights. It is unknown how much the settlement has cost the club.

Mr Ashley, once a controlling figure at the club with a hold over its trademarks and merchandise and Rangers have been embroiled in various High Court litigations, centred on the merchandise deal, in London for years.

The sportswear firm  took Rangers to court to claim for losses arising from the club's kit deal with Hummel, struck in 2018.

A judge previously stated the club had breached a legal agreement allowing the Sports Direct subsidiary to make an offer over club merchandising, including replica kits.

In July, 2019, Judge Lionel Persey said that Rangers had breached an agreement with Sports Direct over the club's kit deal.

He ruled Mr Ashley's company should have been given the chance to match a shirt deal struck with Hertfordshire-based football merchandising firm Elite and sportswear firm Hummel thought to be worth £10m. A damages hearing was expected to follow.

Lawyers acting for the Newcastle United owner's sports firm had claimed that Rangers feared a supporter boycott if Sports Direct had won valuable merchandise rights.

A campaign was launched in early 2015 by the Sons of Struth fans group as Mr King moved to try and shift Mr Ashley's influence at the club and one petition calling for a boycott of Sports Direct attracted over 8000 signatures.

In March, 2015, Mr King and his so-called Three Bears associates including Paul Murray achieved a landslide victory at an extraordinary general meeting to control the boardroom while evicting associates of Mr Ashley, Derek Llambias and Barry Leach. That came after David Somers, who was chairman, and James Easdale had already resigned.

After taking over Mr King declared that his priority would be to tear up the merchandising agreement that saw Mr Ashley's firm take in around 93p from every £1 made from the sale of strips and merchandise.