On October 14, 2025, the European Commission imposed fines exceeding €157 million on Kering’s Gucci, Richemont’s Chloé, and LVMH’s Loewe for engaging in anticompetitive pricing practices.[1] This is not merely a regulatory headline, it represents a direct challenge to a fundamental mechanic of luxury brand strategy and serves as a warning for industries well beyond fashion.

This case is substantial because it strikes at the heart of how premium brands maintain control: not just over quality, but over pricing and perception. In doing so, it raises a broader and more pressing question: where does brand stewardship end, and market manipulation begin?

The Gucci, Chloé and Loewe Cases[2]

In April 2023, the Commission carried out unannounced inspections at the premises of several fashion companies across EU member states.[3] Following these inspections, the Commissions issued formal requests for information and this multi-year investigation is later revealed to be related to the resale price maintenance (RPM) practices of Gucci, Chloé and Loewe. Between 2015 and 2023, these fashion houses were found to have systematically restricted independent retailers from setting their own prices.

The restrictions identified included:[4]

• Enforcing recommended retail prices as de facto fixed prices
• Imposing maximum discount rates
• Dictating specific sales periods
• In some instances, banning discounts altogether

The Commission ruled that these practices violated EU competition law by artificially inflating prices and limiting consumer choice. While the companies cooperated and received reduced fines, the Commission’s position was clear: RPM is not tolerated, even within the luxury industry.

The fine imposed on each company is as follows:

Understanding RPM: Strategic Use by Brands and the Economic Debate

Resale price maintenance (RPM) refers to the practice of setting conditions or final prices that retailers must charge consumers. At its core, RPM enables brands to influence the prices at which their products are sold downstream. In the luxury industry, RPM has long been considered essential to preserving brand equity.

From an economic standpoint, RPM can enhance consumer welfare by:

• Preventing free-riding: RPM helps preserve non-price competition by preventing retailers who invest in staff, services, and store environments from being undercut by discounters who benefit from those investments without contributing.
• Encouraging the launch of new products: For new, complex, or unproven products, retailers are often hesitant to invest time and resources in marketing and sales efforts. A guaranteed high profit margin provided by RPM can incentivize retailers to stock, advertise, and aggressively promote the new product, accelerating its market entry and success.
• Promoting brand image and quality certification: In markets characterized by information asymmetry, high prices can serve as signals of quality, reinforcing consumer trust in premium offerings. This is particularly pronounced in the luxury industry, where consistently high prices help reinforce the perception of exclusivity while any discount could dilute the cultivated premium image.

On the other hand, RPM can undermine consumer welfare by:

• Weakening intrabrand competition (among retailers of the same brand):  RPM eliminates price competition among retailers selling the same brand. When interbrand competition (among different brands) is relatively weak, retailers under RPM will have little incentive to differentiate through discounts or promotions. Moreover, if RPM is set to encourage services that customers do not actually value, the result is simply a higher price without a perceived benefit.
• Reducing retailer efficiency and innovation: In the absence of price pressure, retailers have lower incentives to decrease their costs and invest in innovation. Again, this only applies if interbrand competition is relatively weak, since interbrand competition puts pressure on retailers to be efficient and offer the right level of service.
• Softening interbrand competition (among different brands):  If services are valued less by consumers than their costs, the brand becomes less competitive and this weakens the competitive pressure it imposes on other brands. Prices of other brands may increase as a result.

The legal treatment of RPM often comes down to judging which effect is dominant in a given market: the service-enhancing/new product benefit or the anti-competitive price-raising harm. Most jurisdictions now analyze RPM under the “Rule of Reason,” meaning the court or authority must weigh these positive and negative effects on a case-by-case basis.

However, that is not the case in the EU, where it remains a ‘hardcore restriction’, that is a specific type of anticompetitive conduct that is presumed illegal, unless it  meets very specific exemption criteria (such as short-term promotional campaigns or genuine efficiency gains).[5] For the reasons explained above, economists would argue that there shall be a case-by-case assessment rather than a blanket condemnation:  the legality shall depend on the context and there should be a balance between potential anticompetitive harm and efficiency. The trade-off becomes especially complex in industries like luxury retail, where the brand experience is integral to the product itself. In such cases, RPM may help maintain the prestige and consistency that consumers expect, but it must be carefully designed to avoid unintended anticompetitive effects.

Beyond the Basics: How Complex Distribution Models Amplify RPM Challenges

Distribution strategy fundamentally shapes how RPM affects competition. When brands integrate retail operations or adopt dual distribution models, the competitive dynamics and legal risks change significantly.

Dual Distribution: A Hybrid Challenge for RPM Enforcement

Gucci, Chloé and Loewe adopt a dual distribution, where a brand sells both through independent retailers and its own direct channels. Such a model complicates RPM analysis by introducing a horizontal element into an otherwise vertical context. In this hybrid setup, RPM can resemble horizontal price-fixing between competitors, creating legal risks similar to cartel behaviour. By imposing minimum resale prices, the brand not only limits competition among retailers but also shields its own Direct-To-Consumer (DTC) channel from discounting, leading to uniformly high prices.

The risks extend beyond pricing. Dual distribution often involves sharing sales and inventory data, which, while operationally necessary, can enable collusion. Regulators view these scenarios as more harmful than standard vertical restraints because horizontal collusion directly suppresses competition. Efficiency arguments for RPM, such as preventing free-riding, carry less weight when the brand benefits from the price floor.

Consequently, RPM in dual distribution systems faces stricter scrutiny worldwide, often treated as a hardcore restriction unless clear efficiencies are proven. In the EU, it is assessed with even more scepticism than RPM itself.

The Distribution Trade-Off: Efficiency vs. Control

Strict enforcement of RPM may push brands toward exclusive Direct-To-Consumer models, eliminating intrabrand competition entirely and reducing distribution efficiency. This shift can be particularly challenging for smaller or mid-sized brands, which may lack the resources to build and operate their own retail networks. In markets where direct distribution is not economically viable, these brands may choose to withdraw altogether, leading to fewer choices for consumers and a less diverse retail landscape.

This outcome undermines a core principle of market efficiency: the ability of firms to choose between internalizing distribution (via owned retail channels) or outsourcing it to third-party retailers, based on cost and strategic fit. When enforcement pressures tilt the balance too far toward internalization, the market may lose efficient retailers and face higher prices or lower service quality.

Given these complexities, economists typically emphasize that regulators should consider RPM cases with context, taking into account factor such as:

• Market structure: Is interbrand competition strong enough to offset reduced intrabrand rivalry?
• Product characteristics: Does the product rely on retail experience or brand perception?
• Distribution strategy: Are there legitimate efficiency gains from RPM?
• Consumer impact: Are consumers better off with uniform pricing and premium service, or with price flexibility?

A Pattern of Enforcement: Regulators’ Long View on Fashion and RPM

This is not the first time competition authorities are targeting resale price maintenance (RPM).

For example, in 2006, the Conseil de la concurrence, France’s national competition authority at the time, imposed a €45.4 million fine on 13 luxury perfume and cosmetic brands, including Chanel, L’Oréal, Shiseido, Clinique, Estée Lauder and more, along with three major distributors. [6] The case involved vertical price-fixing agreements, echoing the reasoning behind the Gucci, Chloé and Loewe cases.

In 2018, the European Commission fined Guess, an American fashion brand, €39.8 million for restricting retailers’ ability to independently set resale prices, among other anti-competitive practices. The case revealed a broad pattern of conduct aimed at preserving elevated price levels across European markets.

In 2022, the European Commission further clarified its position by issuing updated guidelines on vertical restraints.[7] The messages were unmistakable:

• Fixed or minimum resale prices are likely to distort competition
• Incentivizing “recommended” prices through threats or rewards is a clear warning sign
• Indirect enforcement mechanisms, such as compliance monitoring, may also constitute RPM

These guidelines went beyond a routine regulatory update; they constituted a clear policy statement, aiming at industries where brands routinely attempt to influence downstream pricing.

Beyond Fashion: A Broader Wake-Up Call