The European Commission (EC) has released information regarding a potential breach of EU antitrust rules by world-renowned fashion designer Pierre Cardin and largest licensee Ahlers. The agreement between the two organizations has limited cross-border trade of Pierre Cardin-licensed clothing as well as sales to specific customers over the past decade in the European Economic Area (EEA).
The EC expressed their view stating “Consumers in the EU must be able to shop around for the best deals. Our concern is that the licensing and distribution practices of Pierre Cardin and Ahlers, its largest licensee, may have prevented consumers from benefiting from lower prices and a greater choice of clothing.” Executive Vice President Margrethe Vestager continued to explain the situation and emphasized the need for active competition between retailers.
The coordination between Pierre Cardin and Ahlers ultimately led to an established ‘absolute territorial protection’, violating EU rules that prohibit such agreements between organizations. This commission alerted the companies when it first obtained evidence of the potential competition law breach in December 2019.
The decision has neither been approved nor rejected, and no legal outcome is guaranteed. If approved, the Commission’s decision would be legally binding and may face fines up to 10% of the company’s annual accumulated sales. No regulations have been confirmed yet, as Pierre Cardin and Ahlers have been granted a right to defend themselves and present arguments at a meeting with the Commission.
Ahlers is not the only name associated with the fashion industry in the spotlight, as Dyson is also seeking for potential competition law breach. Both companies are seeking a conclusion from the commission due to the looming legal findings.
The potential breach in the fashion industry will be closely monitored by the EC as Erling Dörflinger, spokesman for Executive Vice President Margrethe Vestager, confirmed: “The case is still ongoing and therefore we are not in a position to provide any further information at this stage.”
Source: EC Europa