The European Commission has levied a substantial fine of $183 million against luxury fashion brands Gucci, Chloé, and Loewe for engaging in anti-competitive practices. On Tuesday, Commission Vice President Teresa Ribera made a pivotal announcement. It serves as a pillar for safeguarding consumers in the European market and ensuring a level playing field for fair competition.
Much of this fine is a result of advertising by these brands. They limited the ability of independent retailers to establish resale price maintenance for luxury clothing, leather goods, shoes and accessories. The European Commission concluded that such practices removed stores’ independent ability to determine their own retail prices and weakened competition between retailers. These targeted sales channels were both e commerce and brick and mortar, resulting in great ripple effects on market landscape.
Kering, the parent company of Gucci and a number of other luxury fashion houses, has set aside cash to cover this penalty. They intend to start tapping this money in the first half of 2025. The firm is now liable for a record fine of 145 million euros. Loewe, an LVMH-owned brand, was lucky to receive a much lower 18 million euro penalty for its cooperation with the authority’s investigation. Richemont’s Chloé was hit with a maximum fine of almost 20 million euros. The penalty was still cut by 15% due to their cooperation.
In her statement, Commission Vice President Teresa Ribera highlighted the importance of the finding.
“The decision sends a strong signal to the fashion industry and beyond that we will not tolerate this kind of practice in Europe, and that fair competition and consumer protection apply to everyone, equally,” – Teresa Ribera
The European Commission’s decision should be an unmistakable signal to the fashion industry that anti-competitive behavior will not be tolerated. By imposing these fines, the Commission aims to create an environment where fair practices are upheld and consumer rights are prioritized.
