The U.K.’s competition watchdog has fined sportswear retailer JD Sports and sneaker seller Footasylum $6 million (4.6 million pounds) for sharing commercially sensitive information.
As The Financial Times reported Monday (Feb. 14), the Competition and Markets Authority said there was a “black hole” around the discussions between the groups — whose merger the CMA blocked last year — as some phone records of meetings between the two companies chief executives appeared to have been deleted.
JD Sports will pay the bulk of the fine, the FT said, which comes after a series of skirmishes between the CMA and the two chains over JD Sports’ $134 million (90 million pounds) acquisition of Footasylum. That deal was finalized in 2019 but ultimately halted last November after CMA investigation ruled it hurt competition.
The CMA alleges the companies failed to notify the watchdog immediately of meetings between JD Sports executive chair Peter Cowgill and Footasylum chief executive Barry Brown in July and August 2021, in spite of an order barring the sharing of commercially sensitive information while the CMA investigation was under way. One such discussion happened in a car park in Bury and was noted in media accounts last November.
The two executives discussed Footasylum’s financial performance and the plan to close six of its stores, along with information about about supply chain contracts, Footasylum’s office space and its stock allocations of brands. all of which “had the potential to affect competition in the market,” the CMA said.
“Both CEOs cannot recall crucial details about these meetings,” said Kip Meek, who oversaw the CMA investigation. He added the authority hadn’t gotten notes, emails or agendas of the meetings and that some phone records had been deleted before they could be turned over.
Read more: CMA to Watch Google as it Secures Privacy Pledges
JD Sports said it had no legal requirement to notify the CMA about the meetings or take notes of what was said there.
“At no point has there been any intention to breach the rules,” the company said in a statement Monday, “although JD does accept that, inadvertently, it was in receipt of limited commercially sensitive information and that this was not reported to the CMA immediately.”
The report comes soon after a victory for the CMA, which announced last week it had secured a pledge from Google to address competition concerns. The agreement will see Google remove third-party cookies from its Chrome browser.
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