JJB Sports and 'Class Actions' Against Anti-Competitive Behaviour

Last year we reported on the fines imposed by the Office of Fair Trading ("OFT") totalling £18.6 million on JJB Sports, Umbro, Manchester United and Allsports for their role in the price fixing of replica football kits.

This ruling, which was upheld by the Court of Appeal, led to a pioneering case brought by the UK Consumer Association (Which?) on behalf of approximately 500 named individuals, constituting the first ever competition damages class action. A settlement was reached in January 2008, with JJB Sports agreeing to pay £20 in respect of each replica shirt to those who joined the action and £10 to other customers who can show they also purchased a shirt from JJB during the relevant period.

However, such actions are not without their difficulties as the current system requires consumers to "opt in" to any action, forcing Which? to find individual claimants. By contrast, under the US system eligible consumers are automatically included in a class action unless they opt out.

Nevertheless, the OFT recently published reform recommendations aimed at encouraging more private actions against companies for breaches of competition law, in the hope that more private actions will ease the burden on competition regulators to pursue and punish anti-competitive conduct.

With competition law promising to become a routine feature of commercial disputes, this will undoubtedly have implications for the fashion industry, where anti-competitive behaviour such as fixing resale prices is prevalent. Beyond consumer class actions, anti-competitive behaviour can also result in a fine being imposed and in extreme cases imprisonment for directors.