EU Watchdog Probes Fashion Firms’ Pricing Practices

The European Union’s antitrust regulators are investigating the pricing practices of fashion companies, including Kering’s Gucci, who were subject to raids in April. The focus is on the pricing of handbags and leather goods for distributors, according to three individuals with firsthand information who spoke to Reuters.

At the time, Kering confirmed that Gucci was working with EU regulators following a reported dawn raid on its Milan site by the European Union, where such products are made.

Neither the European Commission nor Kering provided a comment on Monday.

Related: EU Watchdog Raids Fashion Firms In Cartel Probe

The Commission did not disclose the names of the companies it conducted raids on. It stated they may have violated EU antitrust regulations pertaining to cartels and restrictive business practices but refrained from giving further information.

The EU competition watchdog is conducting an investigation regarding possible price-fixing by companies on multi-brand retailers. The investigation includes examining if the companies are threatening to withhold their products from retailers who do not comply with their pricing policies.

Engaging in such practices is prohibited by EU antitrust rules, and violations may result in fines of up to 10 percent of the company’s worldwide revenue.

Guess, a clothing company based in the US, received a fine of €40 million ($43 million) in 2018 for breaching regulations that prohibit retailers from setting their own retail prices for its products.