Antitrust: Commission sends Statement of Objections to Pierre Cardin and its licensee Ahlers over distribution and licensing practices for clothing

This article is brought to you in association with the European Commission.

The European Commission has informed Pierre Cardin and its licensee Ahlers of its preliminary view that the companies may have breached EU antitrust rules by restricting cross-border sales of Pierre Cardin-licensed clothing, as well as sales of such products to specific customers.

Pierre Cardin is a French fashion house, which licenses its trademark for the manufacture and distribution of its clothing. German clothing manufacturer Ahlers is the largest licensee of such clothing in the European Economic Area (‘EEA’).

The Commission has concerns that, for more than a decade, Pierre Cardin and Ahlers entered into anticompetitive agreements and coordinated to restrict the ability of other Pierre Cardin licensees and their customers to sell Pierre Cardin-licensed clothing, both offline and online: (a) into Ahlers’ EEA licensed territories; and/or (b) to low-price retailers (such as discounters) offering lower prices to consumers in such territories.

The Commission preliminarily found that the ultimate objective of such coordination between Pierre Cardin and Ahlers was to ensure Ahlers’ absolute territorial protection in the countries covered by its licensing agreements with Pierre Cardin in the EEA.

If the Commission’s preliminary view were confirmed, the companies’ behaviour would violate EU rules that prohibit anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’) and Article 53 of the EEA Agreement).

Sending a Statement of Objections does not prejudge the outcome of an investigation.

Background

Article 101 of the TFEU and Article 53 of the EEA Agreement prohibit agreements between undertakings and decisions of associations of undertakings that prevent, restrict or distort competition within the EU’s Single Market.

As part of its investigation of suspected anti-competitive practices covering the EU, on 22 June 2021 the Commission carried out unannounced inspections in the sector of manufacturing and distribution of clothing. In January 2022, the Commission opened formal proceedings into possible anticompetitive conduct by Pierre Cardin and Ahlers.

A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission’s investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Sending a Statement of Objections and opening of a formal antitrust investigation does not prejudge the outcome of the investigation.

If the Commission concludes, after the parties have exercised their rights of defence, that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and imposing a fine of up to 10% of each of the companies’ annual worldwide turnover.

There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.

For more information

More information on this case will be available on the Commission’s competition website, in the public case register under the case number AT.40642.