UPDATE 1-UK watchdog drops sports bra price fix probe

Fri Jun 13, 2014 2:51am EDT

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LONDON, June 13 (Reuters) - Britain's three biggest department stores John Lewis, Debenhams and House of Fraser have been cleared by a competition watchdog of colluding with a lingerie manufacturer to fix the price of a market-leading sports bra.

The Competition and Markets Authority (CMA) said on Friday it had closed its investigation into allegations involving DBApparel UK Ltd (DBA), which made the popular 'Shock Absorber' brand of sports bras, and the three retailers.

A formal investigation was launched by the CMA's predecessor, the Office of Fair Trading (OFT), last year following a complaint.

The OFT issued a Statement of Objections in September alleging that DBA had entered into nine agreements with the department stores between 2008 and 2011 that infringed competition law by setting a fixed or minimum resale price, raising the possibility of punitive fines.

All four companies denied the allegations.

"Having carefully reviewed the evidence in this case, including the parties' representations, we have decided that there are no grounds for action by the CMA," said Philip Marsden, chair of the Case Decision Group. (Reporting by James Davey; editing by Kate Holton)