Thursday, July 18, 2024

EU sends Pierre Cardin SO over sale restrictions

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French fashion brand Pierre Cardin and its largest licensee must formally respond to a statement of objections from the European Commission accusing them of restricting cross-border clothing sales.

The enforcer said yesterday that it provisionally found Pierre Cardin and its licensee Ahlers Group may have violated EU cartel rules by developing a strategy against parallel imports and restricting sales to specific customer groups for Pierre Cardin-branded products through certain licensing agreement conditions.

The anticompetitive agreement lasted for more than a decade and hampered the ability of competing Pierre Cardin licensees and their customers to sell Pierre Cardin-licensed clothing both offline and online in European Economic Area states where Ahlers was licensed, the authority said.

The arrangement also restricted Ahlers’ rivals and customers from selling to retailers offering discounted products in those countries, the commission added.

The “ultimate objective” of the coordination “was to ensure Ahlers’ absolute territorial protection” in EEA countries covered by its licensing agreements with Pierre Cardin, the agency preliminarily found.

EU competition commissioner Margrethe Vestager said in a statement on Sunday that consumers in the bloc “must be able to shop around for the best deals”. The agency is concerned that the licensing and distribution practices of the two companies may have prevented consumers from accessing lower prices and a greater choice of clothing, she added.

The commission opened its formal investigation into the companies in January 2022. The watchdog noted at the time that it carried out dawn raids in the manufacturing and distribution of garments sector in June 2012, but did not specify if those searches were related to its case against Pierre Cardin and Ahlers.

The companies face a maximum fine of up to 10% of their annual global turnover.

The commission’s deputy director-general for antitrust, Linsey McCallum, said in May that the cost of living crisis has prompted the agency to increasingly focus on cases and sectors that will help mitigate the effects of higher prices. These include branded clothing, energy drinks, food delivery and gasoline markets, she said.

The commission raided several fashion brands, including Gucci, over cartel suspicions in April. One month earlier, it also raided Red Bull as part of an investigation into possible anticompetitive agreements and abuse of dominance, which the company appealed against last week.

Pierre Cardin and Ahlers were contacted for comment.

Counsel to Pierre Cardin

Vogel & Vogel

Partner Joseph Vogel in in Paris, assisted by Cécile Assémat

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