The European Commission has imposed significant fines on luxury fashion brands Gucci, Chloé, and Loewe, totaling €157 million, for violating competition regulations by coordinating resale prices at retailers. The commission stated that these brands restricted independent resellers from setting their own retail prices for nearly all of their product offerings.
According to the commission, the companies enforced specific maximum discount rates and delineated sales periods for their products, effectively controlling pricing across both physical stores and online platforms. The commission observed that the luxury brands aimed to ensure that retailers adhered to the same pricing strategies as their own direct sales channels, which typically yield higher profit margins.
Traditionally, luxury fashion brands have been averse to discounting, often limiting product availability to preserve their exclusive image. However, the emergence of multi-brand retailers has widened access to luxury goods, leading to price variability and challenges in maintaining price control.
The fines stem from raids conducted in April 2023, which prompted the cessation of the observed pricing practices. The breakdown of the fines includes €119.7 million for Gucci, €19.7 million for Chloé, and €18 million for Loewe. However, Gucci and Loewe received a 50 percent reduction in their fines due to their cooperation with the investigation, while Chloé was granted a 15 percent reduction.
In response to the fines, Loewe acknowledged a settlement and emphasized its commitment to compliance with competition laws. Kering, which owns Gucci, noted that the case pertained to historical practices that had been fully accounted for. Chloé expressed its seriousness regarding the matter and indicated it had strengthened its compliance systems since the investigation began.
Teresa Ribera, the European Commission’s executive vice-president for competition, remarked on the importance of genuine price competition for all consumers across various purchasing platforms, reinforcing that the commission will not tolerate similar practices in any sector. This ruling serves as a clear warning to the fashion industry and underscores the importance of fair competition and consumer protection in the market.
