The French clothing brand Pierre Cardin, together with its largest licensee, men's clothing manufacturer Ahlers, received a fine of EUR 5.7 million from the European Commission on Thursday. According to Brussels, the agreements concluded between them violated EU competition rules.
The European Commission found the agreements concluded between the two companies, which were valid in the years 2008-2021, to be inconsistent with EU law (Ahlers announced bankruptcy in 2023). These agreements were intended to protect Ahlers from competition in countries where it had a license to sell Pierre Cardin clothing.
This was intended to prevent other Pierre Cardin licensees from selling the brand's clothing outside their licensed territories, as well as to retailers offering lower prices. As a result, Ahlers gained special protection in the markets.
EC accusations
The point is that traders in the European single market – as explained by the EC in its announcement – they try to purchase products in markets where prices are lower and trade them in markets where prices are higher. This usually leads to price reductions in countries where prices are higher.
Restrictions on such parallel trade may lead to the isolation of the domestic market, with the result that the manufacturer or supplier may charge higher prices to the detriment of consumers. They can also lead to less product diversity. “Therefore, restrictions on parallel trade constitute non-regulatory barriers to the better functioning of the single market and are among the most serious restrictions on competition,” the EC emphasized. The EC informed that any person or company affected by these practices may bring a case to the courts of member states and demand compensation.
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