The antimonopoly authorities of the European Union fined the American company Guess 40 million euros ($45.3 million)for illegally blocking cross-border sales in Europe. This measure is part of the fight against illegal practices that block e-commerce in the EU.

The investigation into Guess began in June 2017 after a year-long investigation into the international sales practices of 1,900 companies. The European Commission found that Guess distribution agreements with retailers restricted the use of their trademarks and Guess trademarks for advertising on the Internet, and also did not allow them to independently set the retail price. In addition, retailers had to get a separate permission from Guess in order for them to be allowed to sell online, while the criteria for approving the application were not based on any specific quality indicators. It was also not allowed to sell to consumers outside the territory established by the agreement.

This system allowed Guess to divide the European market, as a result of which retail prices in Central and Eastern Europe are 5-10% higher than in Western Europe. The illegal practice continued until October 31 last year. The EU antimonopoly authorities reported that the retailer agreed to cooperate, providing the necessary explanations and evidence and thereby receiving a 50% reduction in the fine.

In last month in its official statements Guess tentatively estimated the EU fine from 37 million to 40.6 million euros, stating that in response to the EU investigation into business practices and The necessary changes have already been made to the company's agreements.

Photo: shutterstock, Guess