The European Commission has fined fashion companies Gucci, Chloé and Loewe for fixing resale prices, in breach of EU competition rules.
The Commission's investigation revealed that the three companies restricted the independent third-party retailers they work with from setting their own retail prices, online or offline, for products designed and sold under the Gucci, Chloé, and Loewe brand names.
This kind of anticompetitive behaviour increases prices and reduces consumer choice. The fines, reduced in all three cases due to the companies' cooperation with the Commission, totalled over EUR 157 million.
The Commission's investigation revealed that these three fashion companies engaged in 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 not to deviate from: (i) recommended retail prices; (ii) maximum discount rates; and (iii) specific periods for sales. In some instances, and at least temporarily, they also prohibited retailers from offering any discounts. Gucci, Chloé, and Loewe sought to have their retailers apply the exact prices and sales conditions they used in their own direct sales channels.
To ensure compliance with their pricing policies, the three fashion companies monitored retailers' prices and followed up with retailers whose prices deviated. Retailers in general adhered to the company's pricing policies, either from the start or after being asked to do so.
These anticompetitive practices by Gucci, Chloé, and Loewe deprived retailers of their pricing independence and reduced competition among them. At the same time, Gucci, Chloé and Loewe aimed to protect their own sales from competition from their retailers.
In addition, Gucci imposed online sales restrictions on a specific product line, asking its retailers to stop selling it online. Gucci's retailers complied with these instructions.
The three fashion companies acted independently of each other. However, the duration of the three cases overlaps, and many of the retailers concerned sell products designed by all three designers.
The three decisions concern the high-end segment of the fashion industry and send a strong signal against RPM practices for both online and brick-and-mortar sales to the entire industry. This kind of anticompetitive behaviour increases prices and reduces consumer choice.
In setting the fines, the Commission considered various elements, including the gravity and duration of the infringements, their geographic scope, and the value of the direct and indirect sales of the products concerned generated by each of the three fashion companies in the EEA over the duration of the infringement.
The Commission noted that the three fashion companies cooperated with it under the antitrust cooperation procedure. The individual reductions of the acceptable amounts reflect the timing and value of the cooperation in each case.
In particular, Gucci and Loewe cooperated with the Commission by providing evidence with significant added value at an early stage of the investigation. Gucci's cooperation included revealing an infringement of EU competition rules that was not yet known to the Commission, while Loewe's cooperation enabled the Commission to extend the temporal scope of that infringement.
All three fashion companies cooperated by expressly acknowledging the facts and their infringements of EU antitrust rules, which allowed the Commission to conclude the cases under the antitrust cooperation procedure.
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