The Commission’s investigation found that all three companies restricted the ability of independent third-party retailers with whom they work to set their own online and offline retail prices for products they design and sell under their respective brand names. A release from the Commission said such anti-competitive behavior drives up prices and reduces choice for consumers.
The European Commission has fined three luxury fashion brands for fixing resale prices. An investigation revealed that the three brands restricted the ability of independent third-party partner retailers to set their own online and offline retail prices for products they designed and sold under their respective brand names. They interfered in their business strategies by imposing restrictions on their retailers.
The fines in all three cases were reduced due to the companies’ cooperation with the Commission, totaling more than €157 million.
Gucci, Chloé and Loewe are fashion companies headquartered in Italy, France and Spain respectively. They design, produce, and distribute high-end fashion products, including apparel, leather goods, and various Accessories.
The Commission’s investigation revealed that these three fashion companies had engaged in a practice called resale price maintenance (RPM).
They restricted the ability of their online and brick-and-mortar retailers, which are independent resellers, to set their own retail prices for almost the entire range of products they designed and sold under their respective brand names. The breaches covered the entire region of the European Economic Area (EEA).
Specifically, three fashion companies interfered with their retailers’ commercial strategies by placing restrictions on them, such as requiring them not to deviate from recommended retail prices; Maximum discount rates; And specific period for sale.
In some cases, and at least temporarily, they even stopped retailers from offering any discounts. Their effort was to have their retailers apply the same prices and sales terms that they applied in their direct sales channels.
To ensure compliance with their pricing policies, all three companies monitored retailers’ prices and kept an eye on roving retailers. Retailers typically follow companies’ pricing policies, either from the beginning or after being requested to do so.
The Commission said, “These anti-competitive practices by Gucci, Chloé and Loewe deprived retailers of their pricing freedom and reduced competition among them. At the same time, Gucci, Chloé and Loewe aimed to protect their sales from competition from their retailers.”
Additionally, Gucci imposed online sales restrictions for a specific product line by asking its retailers to stop selling the product online.
The practices ended for all three companies in April 2023, when the Commission conducted unannounced inspections at their premises.
Fibre2Fashion News Desk (DS)