BBC coverage of ‘price fixing’ nail salons slapped with markets watchdog complaint
A complaint has been lodged with the markets watchdog after “positive” coverage of a potential “cartel” of nail technicians jointly raising their prices.
In a piece titled “Nail technicians join forces to raise prices”, the BBC Wales website shared details of over 5,000 nail technicians across Britain collectively raising their prices from today.
The businesses have described the joint rise as “National Nail Price Increase Day.”
According to the BBC, the Nail Tech Org, the company behind the movement, said it decided to make the change after calculating its members were earning below the minimum wage.
But the collective action has been referred to in a complaint to the Competition and Markets Authority as a potential breach of competition law.
The complaint, seen exclusively by GB News, points out that the BBC quotes a nail technician saying: “It’s really beneficial that we are all raising our prices the same day and you know no-one is going to undercut each other.”
According to the complainant, this is an example of price fixing.
They added that they were concerned by the “positive” reporting by the BBC, which they said could make “coordination between these companies easier” and strengthen the potential price fixing.
Amy Guy, founder of the Nail Tech Org, told the BBC that the leading issue in the industry was “unfair pricing.”
The BBC added that Ms Guy “wanted to give nail techs the confidence to correctly calculate their prices based on the cost of running their business.”
In an open letter in reaction to the coverage, the CMA published an open letter to all nail technicians.
The authority said it wanted to underline “that businesses must set their prices independently and that competitors should not discuss or coordinate among themselves the timing or amount of any price increases (whether directly or through a trade body or other membership organisation).”
It added that this ensures that customers can shop around for a good deal.
The open letter continued to say that “it is important that all businesses, as well as their trade bodies and membership organisations, are aware of and comply with their obligations under competition law as breaches can attract substantial fines and directors of companies which are found to have broken competition law may face disqualification.”
It added: “Individuals who agree to fix prices may also be committing a criminal offence.”
The CMA stressed that it had not conducted a formal investigation in this case.
On the government website, businesses are advised that they must follow the rules “on all types of anti-competitive activity”, which includes price fixing.
The CMA publishes information on competition law to guide businesses on how to compete fairly.
In its guidance, it urges people to watch out for minimum prices and price-fixing, which the watchdog describes as “agreeing with competitors what price you will charge to avoid having to compete with each other.”
“This can mean higher prices and customers – who will often be other businesses as well as consumers – end up overpaying for what they get.”
The BBC has since updated its piece to include a reference to the CMA’s open letter.
Nail Tech Org were contacted for comment.