Tuesday, August 05, 2003

Antitrust News: Feds Eye Top Modeling Agencies Conspiracy

Peter Kaplan of Reuters reports that the DOJ is joining the investigation of fashion modeling agencies for allegedly charging inflated commissions and expenses.
Lawyers with the Justice Department antitrust division have conducted interviews in connection with antitrust complaints leveled in a civil class action lawsuit against the agencies, the sources said.

A spokeswoman for the department declined to comment on the case or whether department was investigating.

Last month a federal judge granted class action status to a complaint against several modeling agencies, including Elite Model Management and Ford Models Inc.

The class is expected to be made up of thousands of models. The judge appointed the law firm of Boies, Schiller & Flexner as lead counsel.

Elite and Ford are both top modeling agencies. Elite models include actress Lara Flynn Boyle as well as Lauren Bush, niece of President Bush. Ford represents supermodels like Christie Brinkley, Jerry Hall, Frederique, and Rachel Hunter.

The suit, filed in Manhattan federal court, alleges the agencies fixed models' commission rates at 20 percent, twice the 10 percent allowed by state law for employment agencies. The models alleged that the defendants conspired to evade state pricing regulations by calling themselves model management companies.

In the lawsuit, the plaintiffs say price-fixing in the industry stretches back to the 1970s. They contend the agencies used a trade association called the International Model Management Association as a clearinghouse to discuss rates and other competitive terms.
What a grand scheme. The modeling agencies are being sued under antitrust because they did not follow a state price fixing law. Then, they are being hammered for an alleged conspiracy 30 years old.

It will be interesting to see how the modeling agencies choose to defend themselves, if at all. I suspect that these agencies are home to capitalism-like money, but are devoid of capitalism-like principles.

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