EU fines Gucci, Chloé, Loewe over price-fixing practices

The European Commission has fined luxury fashion brands Gucci, Chloé, and Loewe a combined total of over €157 million for illegally fixing resale prices, in breach of EU competition rules.

The investigation found that the companies restricted independent retailers from setting their own prices for products sold under the brands’ names, both online and in physical stores, Caliber.Az reports, citing the European Commission.

The Commission said the practice, known as resale price maintenance (RPM), limited retailers’ commercial freedom and stifled competition, ultimately driving up prices and reducing consumer choice. Gucci, Chloé, and Loewe also imposed rules on discounts and sales periods, with Gucci temporarily banning online sales of a specific product line.

The infringement spanned the European Economic Area (EEA), covering a range of high-end fashion products including apparel, leather goods, shoes, and accessories. The duration of the violations differed: Gucci from April 2015 to April 2023, Loewe from December 2015 to April 2023, and Chloé from December 2019 to April 2023. The practices ended following unannounced Commission inspections in April 2023.

Fines were adjusted downward due to the companies’ cooperation with the Commission. Gucci and Loewe received 50% reductions for providing valuable evidence, while Chloé’s fine was reduced by 15%. The resulting penalties were €119.7 million for Gucci, €19.7 million for Chloé, and €18 million for Loewe.

The Commission emphasised that while the brands acted independently, the overlapping nature of their practices affected many retailers selling products from all three companies. The decisions mark a clear warning to the luxury fashion sector that RPM practices, both online and offline, will not be tolerated.

The investigation was initiated by the Commission itself, with formal proceedings opening in July 2024. Companies found in breach of EU antitrust rules are obliged to pay fines into the EU budget, which reduces Member States’ contributions in the following year.

Individuals or companies affected by anticompetitive practices may also seek damages in national courts, with the Commission’s decision serving as binding proof of illegality. The Commission has provided a whistleblower tool to allow anonymous reporting of such practices.

By Aghakazim Guliyev