Gucci, Chloé and Loewe ring up $165 million in fines for years of retail price control in Europe

BRUSSELS (CN) — That designer handbag never went on sale for a reason.

Three luxury fashion brands now face 157 million euros ($165 million) in fines after European regulators caught them telling stores what prices to charge shoppers — a practice that’s illegal under EU competition law.

Gucci took the biggest hit at 119 million euros, while Chloé was fined 19 million euros and Loewe, 18 million. All three brands cooperated with investigators and admitted wrongdoing, which reduced their fines. European regulations allow fines up to 10% of a company’s total annual revenue for competition violations.

The European Commission — the EU’s executive branch — found the fashion houses had been engaging in what’s called “resale price maintenance” — essentially dictating what independent retailers could charge for their handbags, shoes, clothing and accessories, both online and in stores across Europe.

The brands set recommended prices, capped how much discount retailers could offer and even controlled when sales could happen.

“In Europe, all consumers, whatever they buy, and wherever they buy it, online or offline, deserve the benefits of genuine price competition,” said Teresa Ribera, the EU’s chief for competition issues, in a statement Tuesday.

Without the ability to compete on price, retailers had no way to undercut each other or offer deals to shoppers. The fashion brands kept close tabs on what stores were charging and contacted any retailer that strayed from their pricing rules.

Most stores fell in line, either right away or after getting pushback from the brands.

Gucci’s violations went back the furthest, running from April 2015 to April 2023. Loewe’s lasted from December 2015 to April 2023, while Chloé’s spanned December 2019 to April 2023. All three stopped the practice in April 2023 when European officials showed up unannounced at their headquarters in Italy, Spain and France, respectively.

Brussels opened formal proceedings against the three companies in July 2024, more than a year after the initial raids. Full details of the decisions won’t be publicly available until “confidentiality issues” are resolved, the commission said in a statement.

Gucci went a step further with one product line, telling retailers they couldn’t sell it online at all. The stores complied with that demand too.

The three brands acted on their own rather than coordinating with each other, though many retailers carried all three labels.

Gucci is owned by French luxury conglomerate Kering, which reported 17 billion euros in total revenue in 2024. Chloé belongs to Swiss-based Richemont, while Loewe is part of LVMH — the world’s largest luxury group, with 85 billion euros in annual sales for 2024. For these giants, the fines represent a small fraction of their revenues but a significant reputational hit.

European regulators said the decision should serve as a warning to the entire fashion industry that price-fixing leads to higher costs and fewer choices for shoppers. Retailers or shoppers who were hurt by the pricing schemes can also sue for damages in their national courts.

Gucci and Loewe got their fines cut in half for cooperating early and providing evidence. Gucci even revealed violations investigators didn’t know about yet, while Loewe’s help extended the investigation’s timeline. Chloé got a smaller 15% reduction.

The discounts stem from European rules that give companies a break on penalties when they voluntarily admit wrongdoing and provide useful information to investigators. Depending on how much they help and how early they come forward, companies can see their fines dramatically reduced or, in some cases, avoid them entirely.

The EU also encourages individuals to report anticompetitive behavior through an anonymous whistleblower system. Tips from insiders can help regulators uncover secretive practices more quickly than traditional investigations, officials say.

The fine money goes into the EU’s general budget, which means member countries will pay less next year.

Gucci’s 119 million-euro fine could have been much worse. With Gucci generating 7.7 billion euros globally in 2024, the maximum penalty could have topped 770 million euros. The fine comes at a difficult time for Gucci, which reported a 23% revenue drop from the previous year.

Under EU law, the commission’s findings serve as binding proof that the violations occurred, making it much easier for retailers to win compensation cases. So far, no major retailer lawsuits have been announced, but the regulatory framework makes such claims particularly attractive in Europe compared to the U.S.

Courthouse News correspondent Yuval Molina is based in Brussels.