EU Commission penalizes luxury fashion houses for anticompetitive pricing
The European Commission has fined Gucci, Chloé, and Loewe a total of more than €157 million for fixing resale prices, in violation of EU competition rules, Kazinform News Agency correspondent reports.
According to the Commission, “the three companies restricted the ability of the independent third-party retailers they work with to set their own online and offline retail prices for products designed and sold by Gucci, Chloé and Loewe under their respective brand names.” This practice, known as resale price maintenance (RPM), reduces competition between retailers and leads to higher prices for consumers.
The investigation found that “companies interfered with their retailers' commercial strategies by imposing restrictions on them, such as requiring them to not deviate from: recommended retail prices; maximum discount rates; and specific periods for sales. In certain cases, and at least temporarily, they also prohibited retailers from offering any discounts.” The companies also monitored retailers’ prices to ensure compliance, contacting those that deviated.
Gucci, Chloé and Loewe sought to align retail prices with those in their own stores, limiting resellers of pricing independence and protecting their direct sales. Gucci also restricted online sales for one of its product lines, asking retailers to stop selling it online.
The Commission determined that the three companies acted independently, though the infringements overlapped and involved many of the same retailers. The practices took place across the entire European Economic Area and ended in April 2023, when the Commission conducted unannounced inspections.
Gucci’s infringement lasted from April 2015 to April 2023, Chloé’s from December 2019 to April 2023, and Loewe’s from December 2015 to April 2023.
All three companies cooperated with the Commission, resulting in reduced fines. Gucci and Loewe received a 50% reduction each, while Chloé’s fine was reduced by 15%. The final penalties amounted to €119.7 million for Gucci, €19.7 million for Chloé, and €18 million for Loewe.
“Today we have fined three European fashion houses for interfering with their independent retailers’ prices in breach of EU competition rules. In Europe, all consumers, whatever they buy, and wherever they buy it, online or offline, deserve the benefits of genuine price competition,” said Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition. “This decision sends a strong signal to the fashion industry and beyond that we will not tolerate this kind of practices in Europe, and that fair competition and consumer protection apply to everyone, equally.”
Last month, the European Commission fined Google €2.95 billion for abusing its dominant position in the advertising technology market.
