Gucci, Loewe, Chloé (AT.40840, AT.40881, AT.40880)

1. CASE SUMMARY

A. Summary of facts

Gucci, Chloé, and Loewe are renowned European fashion houses headquartered in Italy, France, and Spain, respectively. They design, produce, and distribute luxury high-end goods, including ready-to-wear clothing, leather goods, shoes, and fashion accessories. The European Commission launched unannounced inspections in April 2023 and found that all three brands had implemented company-wide resale price maintenance (‘RPM’) strategies across the entire European Economic Area (‘EEA’) to protect their direct sales and stifle downstream price competition.

Each brand operated a dual distribution system: alongside supplying independent retailers selling online and offline, they competed with those retailers through their own boutiques and official websites. Within these systems, the brands treated their recommended retail prices (‘RRPs’) as mandatory fixed resale prices and thereby restricted the commercial freedom of independent retailers. They also issued markdown guidelines, often linked to seasonal collections, which prescribed maximum discount rates and specific promotional periods and prohibited discounting outside those parameters. In addition, bilateral ‘no markdown’ policies temporarily or permanently prevented retailers from discounting certain key products. Gucci, for example, entered into ‘no markdown’ gentlemen’s agreements with retailers.

The brands monitored and enforced compliance both directly and indirectly. Chloé purchased an online price-monitoring tool in February 2020 to monitor distributors’ online prices and identify discrepancies. Gucci contracted similar services in January 2019 to generate detailed reports on the resale prices charged by online wholesalers and department stores and on deviations from its RRPs. Wholesale teams also reviewed retailers’ websites directly and followed up on complaints by retailers concerning discounting by other distributors. Deviations resulted in telephone calls, emails or meetings, sometimes deliberately avoiding written records, through which pressure was exerted or future supplies were threatened.

Gucci also concluded bilateral buy-back arrangements with certain retailers under which it repurchased unsold merchandise at the end of the season. These arrangements reduced the financial burden associated with compliance with its ‘no markdown’ policy and effectively subsidised adherence to that policy. In addition, between 8 July and 31 December 2021, Gucci instructed retailers throughout the EEA to cease online sales of the ‘Diana’ handbag. Retailers could display the product online only if they had stated that it was available exclusively in physical stores. Gucci actively monitored compliance and requested the immediate removal of non-compliant online listings.

All practices ceased when the Commission carried out dawn raids in April 2023 and the three brands admitted the infringements under the cooperation procedure. The European Commission imposed fines of 119.674 million EUR on Gucci, following a 50% reduction; 16.690 million EUR on Chloé, following a 15% reduction; and 18.009 million EUR on Loewe, following a 50% reduction.

B. Legal analysis

B.1 - Article 101(1) TFEU – framework of analysis

The legal assessment is grounded under Article 101(1) TFEU and Article 53(1) of the EEA Agreement, which prohibit agreements between undertakings and concerted practices which have as their object or effect the prevention, restriction, or distortion of competition. The high-end fashion sector routinely utilises selective distribution systems. Under a dual-distribution model, a brand owner acting as a supplier (upstream) also competes with its independent distributors on the downstream retail market via its own direct sales channels. In such vertical relationships, any pricing restrictions imposed on independent wholesalers eliminate intra-brand price competition, artificially raising consumer price levels and insulating the supplier's direct sales from competition.

B.2 - Article 101(1) TFEU – agreement vs. unilateral conduct and 'by object' restrictions

To establish an agreement under Article 101(1) TFEU, a concurrence of wills between at least two undertakings is required. The brands occasionally claimed their pricing guidelines were unilateral suggestions. However, the Commission applied the settled legal principle of ‘tacit acquiescence’ developed in Bayer, Volkswagen, and Super Bock. Since retailers generally adhered to the RRPs, markdown limits, and sales periods (whether through commercial interest or under pressure), their compliance established a de facto agreement. Retailers also actively sought pricing instructions and cross-complained about discount deviations, confirming mutual acquiescence.

RPM constitutes a form of coordination that is highly harmful to normal competition; it is a hardcore restriction of competition, and, in these cases, also a restriction by object, following a check required by the European Court of Justice in Super Bock. Gucci’s online sales restriction concerning the ‘Diana’ handbag was likewise a restriction by object. By preventing online sales, Gucci deprived retailers of their pricing and marketing independence on the internet and limited their market and geographic reach, contrary to Article 101(1)(b) TFEU and the principles established in Pierre Fabre.

B.3 - Single and continuous infringement

The various elements of the infringements (RRP compliance, discount ceilings, and sales dates) were determined to constitute a single and continuous infringement. They were not isolated, sporadic occurrences but were part of an identical overall company-wide plan executed continuously to eliminate downstream intra-brand price competition and to restrict the sales channels in which the retailers could sell the products.

B.4 - Article 101(3) TFEU – no block or individual exemption

The practices could not benefit from the Vertical Block Exemption Regulation (‘VBER’). RPM is a hardcore restriction under Article 4(a) of the VBER, while the online sales ban concerning the ‘Diana’ handbag is a hardcore restriction under Article 4(e) of the VBER. The presence of these restrictions excluded the vertical agreements as a whole from the block exemption.

Very briefly, the cases mention that the brands also failed to satisfy the four cumulative conditions for an individual exemption under Article 101(3) TFEU. There was no objective evidence that the restrictive practices generated efficiency benefits, promoted technical or economic progress, or that a fair share of any such benefits was passed on to consumers. Instead, the practices served only to artificially inflate retail prices, protect the brands' direct retail margins, and prevent consumers from accessing competitive online options.

B.5 - Fines – calculation and cooperation

The Commission imposed fines under Article 23 of Regulation 1/2003, applying its 2006 Fining Guidelines. The basic fine was calculated by applying an 8% gravity percentage to the EEA-wide average annual value of sales (reflecting the vertical nature of the agreement and its extensive geographic scope) and multiplying it by the duration in days:

• Gucci: 30 April 2015 to 18 April 2023 (2,911 days; 7.96 multiplier).
• Loewe: 10 December 2015 to 18 April 2023 (2,687 days; 7.35 multiplier).
• Chloé: 1 December 2019 to 18 April 2023 (1,235 days; 3.38 multiplier).

Reductions were granted under the antitrust cooperation procedure based on the timing and qualitative value of the evidence provided. Gucci received a 50% reduction because it disclosed the previously unknown online sales restriction concerning the ‘Diana’ handbag and supplied highly valuable internal interview records containing extensive direct employee statements about oral agreements reached by telephone. Its final fine was 119,674,000 EUR. Loewe likewise received a 50% reduction after providing crucial contemporaneous documents covering December 2015 to mid-2017, which enabled the Commission to establish and extend the temporal scope of the infringement to that earlier period. Its final fine was 18,009,000 EUR. Chloé received a 15% reduction because it admitted the facts and liability and waived certain procedural rights, creating administrative efficiencies, but did not provide unique new evidence. Its final fine was 19,690,000 EUR.

B.6 - Liability of parent companies

Finally, parent companies (Kering, LVMH, and Richemont) were held jointly and severally liable with their respective subsidiaries based on the single economic unit doctrine and the rebuttable presumption of decisive influence arising from 100% shareholding, as established in Akzo Nobel. No aggravating or mitigating circumstances were applied.

2. QUOTES

“Measures or practices adopted or imposed in an apparently unilateral manner by a supplier can constitute an agreement or a concerted practice within the meaning of Article 101(1) of the Treaty and Article 53(1) of the EEA Agreement if, at the very least, tacit acquiescence of the other party is established.” (Chloé, §40; Gucci, §60; Loewe, §34)

“The direct effect of RPM is the elimination of intra-brand price competition, by preventing some or all distributors from lowering their sale price for the brand concerned, thus resulting in a price increase for that brand.” (Commission Guidelines on Vertical Restraints, §196(g), cited in Chloé, §49; Gucci, §69; Loewe, §43)

“Chloé aimed to enhance the brand image by achieving and maintaining a uniform and high retail price level between the wholesalers amongst themselves and between the wholesalers and Chloé’s direct distribution channels, which reduced intra-brand price competition on Chloé’s products. Evidence on file shows that the purpose of the RPM practice was also to protect Chloé’s direct sales.” (Chloé, §22)

“Hence, by enforcing its pricing policies to the retailers operating online and by imposing the online sales restrictions, Gucci prevented the retailers from exploring the full potential of the increased choice and price competition afforded by the online channel.” (Gucci, §78)

“Such interventions occurred via email, WhatsApp or – most frequently – via phone or in in-person meetings, as Gucci was aware of the potential illegality of such interventions and wanted to avoid written records” (Gucci, §32)

3. RELEVANT LEGISLATION

• Article 101 TFEU
• Regulation 2022/720
• Vertical Guidelines
• Article 53 EEA Agreement
• Regulation 1/2003
• Fining Guidelines

4. PRACTICAL SIGNIFICANCE

The decisions confirm that luxury positioning does not provide immunity from the prohibition of RPM. Standard branding and marketing considerations, such as preserving brand prestige, price integrity or price consistency, do not justify RPM, markdown restrictions or online sales bans. Such practices may be treated as restrictions by object.

The cases are particularly relevant to suppliers using dual distribution systems. Those suppliers must preserve the downstream pricing independence of their independent retailers. Recommended retail price lists, markdown guidelines, prescribed promotional periods and bilateral ‘no markdown’ arrangements may create significant competition law exposure where they are used to protect the supplier’s own boutiques or official webshops from price competition.

The decisions also underline the strict protection afforded to online selling. A temporary or permanent prohibition on online sales of a particular product line, such as Gucci’s restriction concerning the ‘Diana’ handbag, may constitute both a hardcore restriction and a restriction by object. Brands must not prevent independent retailers from using online channels to reach customers.

The different fine reductions illustrate the value attached to proactive and substantive cooperation. Gucci and Loewe obtained 50% reductions because they provided significant added value, respectively disclosing an unknown infringement and supplying contemporaneous evidence that filled gaps in the European Commission’s file. Chloé’s admission of liability and waiver of procedural rights resulted in a more limited 15% reduction because it did not provide comparable new evidence.

Finally, the cases demonstrate the exposure of parent companies to joint and several liability for vertical restrictions implemented by wholly owned subsidiaries. Under the single economic unit doctrine and the Akzo Nobel presumption of decisive influence, parent companies such as Kering, LVMH and Richemont may be held liable, which reinforces the importance of rigorous group-wide competition compliance and auditing.