EU cartel raids target fashion designers offering sale periods and discount changes

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By Foo Yun Chee

BRUSSELS (Reuters) – EU antitrust regulators, who raided some fashion companies last month, are focusing on a group of designers who two years ago called for changes to sales periods and discounts, people familiar with the matter said.

The European Commission, which did not name the companies or the countries in which it carried out the searches, said the companies may have breached EU cartel rules against restrictive business practices, including the fixing of price.

The EU’s competition watchdog is looking at some signatories to an open letter published in 2020 that called for fundamental changes to the industry to make it more environmentally and socially sustainable, the people said.

Hundreds of companies around the world signed the open letter and signatories included Dries Van Noten, Thom Browne, Proenza Schouler, Lane Crawford, Mary Katrantzou, Gabriela Hearst, Altuzarra and Missoni Group. These companies did not respond to emails seeking comment.

The Commission declined to comment.

The open letter proposed moving the fall/winter season from August to January and the spring/summer season from February to July to align with the actual seasons they correspond to.

He also offered end-of-season discounts to allow for a fuller sale, in an effort to reduce fabric and inventory waste. The open letter came as the fashion industry felt the impact of the COVID-19 pandemic, leading to delays in deliveries.

The Commission also sent short questionnaires to other fashion companies asking if they had signed the open letter and details of their activities in the European Union, one of the people said.

It was also possible that a chat room had been set up to discuss the matter, the person said, a practice generally frowned upon by regulators and which has resulted in hefty fines for some banks after their traders colluded. via chat rooms to fake financial benchmarks.

Companies that breach EU cartel rules face fines of up to 10% of their global turnover.

(Reporting by Foo Yun Chee; editing by David Evans)

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