The European Commission has notified the French fashion brand Pierre Cardin and its German licensee Ahlers that they may have breached EU antitrust rules over restricting sales of its clothing to certain EU countries.
The Commission announced the news in a press release on Monday, which comes after the launch of a formal antitrust investigation on Pierre Carding and Ahlers on 31 January 2022. The European Commission is concerned that the French luxury brand and its licensee have been coordinating to ensure Ahler's dominance in the European Economic Area (EEA) for over a decade.
Luxury brands not for poorer countries?
Pierre Cardin and Ahler's potential regulation of sales of its high-end clothing would violate EU rules that prohibit anticompetitive agreements. A possible motivation for this agreement could be that the luxury company does not want to sell their products at lower prices in poorer EU countries.
"One of the key benefits of the EU's single market is that consumers can shop around for a better deal. Barriers erected to prevent parallel imports lead to undue fragmentation of the single market," Executive Vice-President Margrethe Vestager, in charge of competition policy, said in the press release when the case was first opened.
Margrethe Vestager, Executive Vice-President of the European Commission. Credit: European Parliament
"This is why we are going to investigate whether the licensing and distribution practices of Pierre Cardin and its largest licensee Ahlers may be restricting offline and online sales of consumer goods such as garments, shoes and accessories in the EU," she added.
Right to a defence
A Statement of Objection such as the one that the European Commission sent to Pierre Cardin and Ahlers is not an official indictment. Now, the two companies have the right to request an oral hearing to present their defence.
However, if the European Commission is still convinced that EU antitrust rules have been breached, both Pierre Cardin and Ahlers could be fined up to 10% of their annual worldwide turnover.
