COMP Flash | Gucci, Chloé & Loewe fined 157 € million for anticompetitive pricing practices

Summary

The European Commission has fined fashion giants Kuy, Gucci, and Louis for engaging in resale price maintenance (RPN), distorting competition within their distribution networks. These companies imposed strict pricing rules on retailers, preventing them from setting their own prices and artificially keeping prices high. The fines, totaling over €150 million, were reduced due to the companies' cooperation. This decision underscores the EU's commitment to maintaining open, fair, and competitive markets that benefit consumers with lower prices and greater choice.

Takeaways

• 😀 The European Commission imposed fines on Kuy, Gucci, and Louis for distorting competition in their distribution networks.
• 😀 The total fines amount to over €150 million for the three companies combined.
• 😀 All three companies engaged in resale price maintenance (RPN), which restricts retailers' freedom to set their own prices.
• 😀 RPN occurs when brands dictate the prices retailers must sell their products for, instead of allowing them to decide freely.
• 😀 The companies sold products both through their own stores and online channels, as well as through independent retailers.
• 😀 For competition to function properly, retailers must have the freedom to set their own prices, which was hindered by these companies.
• 😀 Chloe, Gucci, and Louis imposed strict rules on retail prices, discount rates, and discount dates, forcing retailers to comply.
• 😀 In some cases, the companies even prohibited any discounts on specific products, limiting price flexibility.
• 😀 The companies closely monitored the market and pressured retailers who didn't follow their pricing rules.
• 😀 The aim of these practices was to maintain high prices in line with what the brands charged in their own stores and across all sales channels.
• 😀 These actions led to higher prices for consumers and limited the possibility of lower prices through independent retailers.
• 😀 The infringement was acknowledged by all three companies, and they cooperated with the European Commission, resulting in a fine reduction between 15% and 50%.
• 😀 The European Commission’s decision sends a clear message: resale price maintenance has no place in Europe, and markets must remain open, fair, and competitive.

Q & A

What decision did the European Commission make today?

The European Commission adopted three decisions imposing fines on Kuy, Gucci, and Louis Free fashion companies for distorting competition within their respective distribution networks.

How much do the fines imposed on the companies amount to?

The fines imposed on the companies total over 1507 million euros.

What is resale price maintenance (RPN)?

Resale price maintenance (RPN) refers to when a brand sets the price at which retailers must sell its products, rather than allowing retailers to set their own prices.

Why is resale price maintenance considered illegal?

Resale price maintenance is illegal because it distorts competition, as it prevents retailers from freely setting prices and can lead to artificially high prices for consumers.

What practices did Chloe, Gucci, and Louis engage in?

Chloe, Gucci, and Louis engaged in practices that imposed strict rules on retail prices, discount rates, and discount dates, leaving retailers with little choice but to comply.

What was the effect of these companies' practices on retailers?

The companies restricted the freedom of retailers to set their own prices, monitored the market closely, and pushed back against those who did not comply with their pricing rules.

What was the aim of the companies' actions?

The companies aimed to keep prices artificially high, aligning what consumers paid across all sales channels with the prices charged in their own stores.

How did the companies' actions affect consumers?

These practices limited the possibility of lower prices for consumers, ultimately reducing their choice and access to competitive prices.

Which products were affected by the companies' pricing practices?

The pricing practices affected a wide range of products, including clothes, leather goods, shoes, and fashion accessories.

What reduction in fines did the companies receive, and why?

The companies received a fine reduction between 15 and 50% because they acknowledged the infringement and cooperated with the Commission, allowing the cases to be closed more quickly and efficiently.