Commission opens formal investigation into distribution practices of clothing company Guess

The European Commission has opened a formal antitrust investigation into the distribution agreements and practices of clothing manufacturer and retailer Guess. The Commission will examine whether Guess illegally restricts retailers from selling cross-bord

Commissioner Margrethe Vestager, in charge of competition policy said: “The Commission has information indicating that Guess, in its distribution agreements, may ban cross-border sales to consumers. One of the key benefits of the EU’s Single Market is that consumers can shop around for a better deal. We are going to investigate Guess’ practices further to ensure that it’s playing by the rules and not preventing consumers from buying products across borders.”

Guess designs, distributes and licenses clothing and accessories. Guess’ apparel is marketed under numerous trademarks, including “GUESS?” and “MARCIANO”.

The Commission will investigate information indicating that Guess’ distribution agreements may restrict authorised retailers from selling online to consumers or to retailers in other Member States. They may also restrict wholesalers from selling to retailers in other Member States.

Companies are generally free to set up the distribution system that best serves them. However these systems must comply with EU competition rules. In particular, consumers must be free to purchase from any retailer authorised by a manufacturer, including across national borders.

Guess’s agreements under investigation may be in breach of EU competition rules (Article 101 of the Treaty on the Functioning of the European Union), which prohibit agreements between companies that prevent, restrict or distort competition within the EU’s Single Market.

In its recent final report on the e-commerce sector inquiry the Commission found that more than one in ten surveyed retailers experienced cross-border sales restrictions in their distribution agreements. Such restrictions limit their ability to sell online to consumers in other Member States.

The formal investigation launched yesterday concerning Guess is a stand-alone procedure that is separate from the e-commerce sector inquiry but follows up on one of the issues identified in the inquiry’s final report.