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Fashion brand Guess fined $45 million for blocking e-commerce in the EU

European Union antitrust regulators fined US label Guess 40 million euros for illegally blocking cross-border sales in Europe as part of a crackdown against illegal practices blocking e-commerce in the EU.

Investigation

The investigation into Guess began in mid-2017 following a year-long inquiry into the cross-border online sales practices of 1,900 companies. The European Commission said Guess’ distribution deals with retailers restricted use of the label’s brand names and trademarks in online search advertising and also prevented them from setting independent retail prices. Retailers were also required to get authorisation from Guess before they were allowed to sell online and were not allowed to sell to customers outside their authorised areas. Specific criteria relating to online sales approval was not made clear to retailers.

Inflated prices in certain markets

The Commission said that, in practice, Guess was partitioning off certain European markets which resulted in retail prices 5-10% higher in Central and Eastern Europe than Western Europe. The fashion label cooperated with the Commission into its illegal practice inquiry and received a 50% cut in the fine. In response to the investigation, Guess said that it had already made certain changes to its business practices and agreements.

Source: luxurylawalliance.com

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