Gucci Raid Part of Growing E.U. Antitrust Scrutiny of Fashion
Between staging glossy runway shows and dressing stars for the red carpet, Gucci is a company accustomed to the glare of the spotlight. This week, however, that attention might have felt less comfortable after its Italian offices were raided by European Union antitrust officials.
The unannounced inspection was the latest in a series of regulatory actions, as antitrust officials ratchet up scrutiny of the fashion industry over possible anticompetitive practices.
In March, the European Commission, the bloc’s executive arm, carried out investigations into several beauty and fragrance companies linked to the supply of fragrance ingredients.
Last year, some fashion houses were raided in connection with sustainability targets developed by the industry, including changes in sales periods and discounting strategies that regulators later deemed as potential violations of competition law.
Pierre Cardin and the German clothing maker Ahlers have faced scrutiny over licensing and distribution deals that may have breached rules on cross-border sales.
The heightened attention came after a period of “relative calm,” Greenberg Traurig, a law firm, said in a note. The firm added that the raids underscored the European Commission’s increasing focus on enforcement in the fashion sector after the coronavirus pandemic and urged companies to review business practices to “ensure they are not running afoul of E.U. antitrust and anti-competition regulations.”
Kering, Gucci’s parent company, said on Wednesday that it was “cooperating” with regulators. The commission said in a statement a day earlier that it was looking into the activities of multiple fashion companies based in several member states and that it had also sent requests for information to other undisclosed brands.
“The commission has concerns that the companies concerned may have violated E.U. antitrust rules that prohibit cartels and restrictive business practices including certain horizontal and vertical restrictions,” it said.
Penalties for companies could include fines of up to 10 percent of their global sales.
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