The European Commission has fined fashion companies Gucci, Chloé and Loewe for fixing resale prices, in breach of EU competition rules, thereby increasng prices and reducing choice for consumers.
The Commission says its investigation revealed that 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.
The fines, which were reduced in all three cases due to the companies’ cooperation with the Commission, amounted to over €157 million in total.
The EU investigation revealed that these three fashion companies engaged in a practice called resale price maintenance (‘RPM’). They restricted the ability of both their online and brick-and-mortar retailers, which are independent resellers, to set their own retail prices for almost the entire range of products designed and sold by Gucci, Chloé and Loewe under their respective brand names, including apparel, leather goods, shoes and fashion accessories. The infringements covered the whole territory of the European Economic Area (‘EEA’).
In particular, the three fashion companies interfered with their retailers’ commercial strategies by imposing restrictions on them, such as requiring them to not deviate from: (i) recommended retail prices; (ii) maximum discounts rates; and (iii) specific periods for sales. In certain cases, and at least temporarily, they also prohibited retailers from offering any discounts. Gucci, Chloé and Loewe strived to have their retailers apply the same prices and sales conditions they applied in their own direct sales channels.
“In Europe, all consumers, whatever they buy, and wherever they buy it, online or offline, deserve the benefits of genuine price competition,” said EC vice-president Teresa Ribera: “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.”
Further information on these decisions will be available under the case numbers AT.40840 (Gucci), AT.40880 (Chloé) and AT.40881 (Loewe), in the public case register on the Commission’s competition website, once confidentiality issues have been resolved.
