The Commission’s investigation revealed that the three companies restricted the ability of independent third-party retailers they work with to set their own online and offline retail prices for products designed and sold by them under their respective brand names. This kind of anticompetitive behaviour increases prices and reduces choice for consumers, a Commission release said.
The European Commission has fined three luxury fashion brands for fixing resale prices.
A probe revealed the three brands restricted the ability of independent third-party partner retailers to set their own online and offline retail prices for products designed and sold by them under their respective brand names.
They interfered with their retailers’ commercial strategies by imposing restrictions on them.
The fines, which were reduced in all three cases due to the companies’ cooperation with the Commission, amounted to over €157 million in total.
Gucci, Chloe 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 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 them under their respective brand names. 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 recommended retail prices; maximum discounts rates; and specific periods for sales.
In certain cases, and at least temporarily, they also prohibited retailers from offering any discounts. They strived to have their retailers apply the same prices and sales conditions they applied in their own direct sales channels.
To ensure compliance with their pricing policies, the three companies monitored the retailers’ prices and followed up with deviating retailers. The retailers in general adhered to the companies’ pricing policies, either from the start or after being requested to do so.
“These anti-competitive practices by Gucci, Chloe and Loewe deprived the retailers of their pricing independence and reduced competition between them. At the same time, Gucci, Chloe and Loewe aimed to protect their own sales from competition from their retailers,” the Commission noted.
In addition, 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 the three companies in April 2023, when the Commission carried out unannounced inspections at their premises.
Fibre2Fashion News Desk (DS)
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