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The EU Commission fines Guess € 39.821.000,00 for antitrust violations regarding its selective distribution network in the EEA.

On December 17, 2018 the European Commission condemned three companies of the clothing Group “Guess” to a fine of € 39.821.000,00, for having imposed restrictions on online advertising (Google Adwords), online sales, sales outside their allocated territories and resale prices, to the members of its selective distribution network in the European Economic Area.

Silvia BORTOLOTTI - 01.02.19
Country expert

The Commission found that Guess' distribution agreements restricted authorized retailers from:

1) using the Guess brand names and trademarks for the purposes of online search advertising (namely referring to Google AdWords);

2) selling online without a prior specific (discretional) authorization by Guess;

3) selling to consumers located outside the authorized retailers' allocated territories;

4) cross-selling among authorized wholesalers and retailers; and

5) independently deciding on the retail price at which they sell Guess products.

 

All those restrictions have been regarded by the Commission as antitrust restrictions “by object”, in violation on Article 101(1) of the Treaty (therefore excluding the Commission’s need to prove their restrictive effects on the market) as well as hardcore restrictions under Article 4 of the VBER.

Some passages of the decision in our view, are not fully acceptable, for several reasons; for instance:

the evaluation of all the restrictions as “by object”;

the evaluation of Guess policy regarding the online search advertising;

the territorial and cross selling restrictions being evaluated on the assumption of the existence of a whole selective distribution network, instead of a more complex distribution system in part exclusive and in part selective; in particular the Commission's approach would make it impossible to appoint exclusive distributors at the wholesale level in charge of supplying a selective distribution network established in such country;

the compliance with the geo-blocking Regulation (EU) 2018/302.

 

A more in-depth comment on this decision will be published in the next IDI Newsletter; this theme will be also addressed and discussed during the IDI 2019 Annual Conference (Cernobbio, Lake Como 14-15 June 2019).

 

TEXT OF THE JUDGEMENT

 

Silvia Bortolotti, Secretary General IDI, IDI Country Expert for Italy

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