In a recent development that has stirred the corporate legal industry, both French fashion label Pierre Cardin and one of its longest standing licensees, Ahlers Group, have been implicated in a blatant violation of European Union antitrust laws. This charge was leveled by the European Commission in a preliminary statement of objections made public during this summer.
The allegation revolves around an agreement reached between Cardin and Ahlers in which they pledged to limit cross-border sales and sales to certain customers. That is, they agreed to restrict the availability of Cardin’s products on certain markets and to certain consumer groups. This strategy, evidently aimed at the control of the market and prices artificially, runs in stark violation of the competition laws that stand as the backbone of the EU’s single market policy.
As opposed to fostering an open, multicultural commercial landscape that encourages free competition, this deal subscribes to a more archaic business model—market division—which has been largely phased out in today’s global economic climate.
It remains to be seen what penalties or fines will be levied as a result of this violation. Historically, the European Commission has shown no hesitation in imposing hefty fines and restrictions on firms that flout antitrust guidelines. As an example, tech behemoth Google was fined €4.3 billion in 2018 for antitrust violations of a similar nature, pointing to a strong precedent for these sorts of transgressions.
Given this, it’s crucial for corporations and law firms alike to understand the considerable impact this case could have on future antitrust cases both within and beyond the fashion industry. On one hand, it serves as a potent reminder of the risks associated with non-compliance with antitrust laws. On the other, it underscores the commitment of governments and international bodies to upholding the integrity of the free market.