Does competition law apply to entertainment industry trade unions? The Irish Competition Authority says yes

The issue of whether competition law applies to trade unions is particularly important in the entertainment industry where artists, actors and other self employed individuals often have to act collectively to reach commercially satisfactory agreements with powerful organised groups such as broadcasters and advertisers. Where entertainment trade unions enter into agreements recommending minimum prices for the hiring of services of independent contractors, a formal analysis would suggest that this is a price fixing agreement to which the competition legislation applies.

Such analysis was the outcome of the recent own initiative investigation by the Irish Competition Authority into possible price fixing in the provision of actors’ services in Irish commercial advertising. The only real issues posed by the case were whether individual actors were “undertakings” and whether Irish Equity was “an association of undertakings” whose agreements with commercial buyers fell within the Act. The Irish Competition Authority held that self employed actors are indeed “undertakings” and that Equity is an “association of undertakings” when it acts on their behalf.

The decision was taken on the basis of Irish domestic competition law which follows EU case law. A consequence of this is that when similar facts apply it is very likely that the same outcome would occur in other jurisdictions (including the UK) which follow EU case law. Interestingly, the Irish Competition Authority was prepared to admit that actions carried out by unions in contemplation or furtherance of a trade dispute might possibly be immune from the Competition Act. Thus it might be the case that boycotts per se might fall outside competition law if a trade dispute was being pursued. However, this exemption only applies where the union acts on behalf of employees: Irish Equity was acting in this situation more as a trade association on behalf of independent contractors as opposed to employees; as such the competition legislation applied and no exemption could be granted to the agreement to fix prices for actors’ services.

The implications of the case are quite important in the entertainment (and advertising) world. The Irish Competition Authority said “although Equity as a trade union can doubtless represent bona fide employees in true collective bargaining contexts, self employed persons cannot don the mantle of union membership to evade the provisions of the law.” This analysis will be uncomfortable for artist associations. However if competition law is to apply, it should be borne in mind that it does occasionally allow certain price agreements in circumstances where the sellers are faced with preponderantly powerful buyers. It may well be the case that in the light of this decision, trade unions and associations in the entertainment industry who act on behalf of talent, have to start considering whether the expense of obtaining exemptions (if their agreements are challenged in court or proceedings by regulatory authorities) is worthwhile. In this connection it will be recalled that resale price maintenance was abandoned by book publishers in England principally because they could not afford to defend it.

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