The competition watchdog has discovered that JD Sports engaged in illegal collusion with Leicester City FC to manipulate the prices of its football kits. According to the regulator, the sportswear retailer has confessed to breaking competition laws by reaching an agreement with Leicester City FC to fix prices for official football kits and replicas. As a result, Leicester City FC will be fined up to £880,000 for its participation in this illegal activity. Both parties have acknowledged their involvement in the agreement, and Michael Grenfell, the executive director of enforcement at the Competition and Markets Authority (CMA), emphasizes the importance of robust competition between retailers in enabling consumers to find the best deals. Grenfell also points out that football fans’ loyalty to their teams makes them susceptible to potential price manipulation, and that JD Sports and Leicester City FC colluded to divide markets and artificially inflate prices, potentially leading to fans paying more than they should.
JD Sports, however, will not face a fine as it reported the agreement to the CMA in January 2021 and cooperated fully with the investigation. Nevertheless, Leicester City FC’s penalty would have been higher if it had not admitted to its illegal actions. It is worth noting that JD Sports has previously been fined £4.3m for a separate case in February 2022. In this instance, the company’s former CEO unlawfully shared commercially sensitive information with Footasylum, a rival seller, during discussions for a potential merger. The CMA intervened and rejected the merger due to this misconduct.
Since then, JD Sports has been actively working to enhance its corporate governance and controls. In a surprise announcement in May 2022, Peter Cowgill, the CEO and chairman of JD Sports since 2014, stepped down to address concerns over the company’s corporate governance. Conducting an internal review last year, JD Sports identified that its governance had not developed at the same pace as its growth.
Responding to the investigation into the Leicester City FC deal, JD Sports highlights the steps it has taken to strengthen its competition compliance program and reaffirms its commitment to embedding these measures into its daily operations. The company emphasizes that none of its current or former directors were involved in the illegal conduct.
Leicester City FC states that it fully cooperated with the investigation, which focuses on the limited supply of replica kits and branded clothing to JD Sports for resale. The club asserts that neither its current directors nor senior management were involved in these arrangements, and that its owners were unaware of them. The club maintains that there was no intention to unlawfully restrict the resale of the supplied goods and that there was no significant financial gain from doing so, as only a small amount of kit was provided to JD Sports.
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