JD Sports has accused the Competition and Markets Authority (CMA) of using “inflammatory language” and reaching misleading conclusions after it handed down a nearly £5m fine to the retailer and Footasylum.
The CMA fined JD Sports and Footasylum £4.7m today (February 14) for sharing commercially sensitive information during an investigation by the watchdog.
It accused JD Sports chair Peter Cowgill and his Footasylum counterpart Barry Brown of deleting phone records, and found that the two had held multiple clandestine meetings, including one that was filmed in a car park near Bury, Greater Manchester.
JD Sports had acquired Footasylum for £90m, although the deal was subsequently subject to a lengthy investigation from the CMA, during which time the two businesses were ordered to continue as separate entities.
JD Sports relinquished ownership of Footasylum after choosing not to appeal the CMA’s decision on the takeover late last year.
In a comment from the CMA issued alongside the fines, the chair of the watchdog’s inquiry group, Kip Meek, was scathing.
“There is a black hole when it comes to the meetings. Both CEOs cannot recall crucial details about these meetings,” said Meeks.
“On top of this, neither CEO nor JD Sports’ general counsel can provide any documentation around the meetings – no notes, no agendas, no emails and poor phone records, some of which were deleted before they could be given to the CMA.”
“There is a black hole when it comes to the meetings”
CMA chair Kip Meek
In its response, JD Sports said at no point during the investigation had it sought to breach the rules.
However, it admitted that “inadvertently, it was in receipt of limited commercially sensitive information and that this was not reported to the CMA immediately”.
Despite the qualifier, JD Sports refuted the allegations around the deleting of phone records and insisted it has “always acted honestly and in good faith in its efforts to comply” with the CMA, insisting there was no legal requirement for it to report any meetings between the chief executives of the two businesses.
The sportswear retailer said it had also “voluntarily submitted all of its relevant devices to a third party for expert forensic analysis”.
JD Sports said it did not believe the “description of events or [that] the fine levied” by the CMA in this instance gave a “fair reflection” of its efforts to comply.
- Never miss a story – sign up to Retail Week’s breaking news alerts
No comments yet