 "The logo of fashion house Gucci is seen outside a shop in Milan, Italy. File image/Reuters")
Luxury fashion giants Gucci, Chloe, and Loewe are in trouble for breaching competition rules. The European Union has slapped them with fines totalling more than €157 million (approx. Rs 1,421 crore) for allegedly imposing illegal price curbs on their products.
After a surprise investigation of the three brands, the European Union’s antitrust watchdog, the European Commission, revealed that the companies restricted the ability of retailers they work with to set their own retail prices online and in stores.
Gucci, the Kering-owned Italian label and the largest of the three companies by a significant margin, was fined €119.7 million (Rs 1,095 crore) by Brussels for breaches spanning from April 2015 to April 2023. Meanwhile, the French fashion house Chloé received a €19.7 million (Rs 180 crore) fine for violations that took place between December 2019 and April 2023 and Spanish house Loewe, owned by French luxury group LVMH, was fined 18 million euros (Rs 164.7 crore) for the infringement period between December 2015 and April 2023.
Why has the EU imposed the fine?
During an investigation by the European Commission, it was revealed that these brands curbed independent retailers from setting their own prices online and in physical stores. This, in turn, increased prices and reduced the choice for consumers.
“This decision sends a strong signal to the fashion industry and beyond that we will not tolerate this kind of practice in Europe,” the EU’s antitrust commissioner Teresa Ribera said in a statement.
The penalties were reduced for all three after they acknowledged their violations and cooperated with the commission. Reprimanding the actions, the EU said the companies “interfered with their retailers’ commercial strategies”, including by forcing them not to deviate from maximum discount rates and specific periods for sales.
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In some cases, the three brands temporarily banned retailers from offering any discounts, the commission said, adding that the firms “acted independently of each other”.
The EU’s antitrust division is known for its long-running campaign against fashion cartels and restrictive business agreements. These fines are the direct result of a large-scale raid EU regulators conducted on the headquarters of fashion companies back in April 2023.
Kering said it “acknowledges” the EU’s decision “related to past commercial practices at Gucci” and had prepared for a fine in its financial statements for the first half of 2025. “The exposure is entirely covered,” it added.
Loewe said it “reiterates its firm commitment to acting in strict compliance with competition law”.
“We take this matter extremely seriously and acted with the utmost diligence to address it,” Chloe, owned by Swiss group Richemont, said in a statement.
“Since the 2023 investigation, we have reinforced our compliance framework with enhanced measures to ensure strict adherence to competition law.”
Regulatory issues are piling up for the luxury sector. According to the Financial Express, Italian authorities have been pressuring major labels, including Armani, Dior, Loro Piana, and Tod’s, regarding worker exploitation in their supply chains. On top of that, the industry is grappling with new problems like breaches of protected client data.
With inputs from AFP