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Dawn raids – luxury brands take note

The European Commission has confirmed that it carried out "dawn raids" on a number of companies active in the fashion industry on 18 April 2023. This is the third set of dawn raids that the Commission has carried out in the fashion industry in the past three years – although it has stated that the latest set is unrelated to the other two – and follows dawn raids carried out by the Commission and the UK’s Competition and Markets Authority (CMA) in March 2023 on companies active in the wholesale fragrance supply industry (see our update here).

This recent activity by competition regulators, including the CMA in the UK, shows that enforcement of competition law rules on anti-competitive agreements against luxury brands, and suppliers of raw materials to brands, is a priority. In particular, whilst competition regulators do not typically provide extensive details about ongoing investigations, specific concerns may have arisen in relation to potential discussions and co-ordination between competitors on "green" initiatives. Whilst green initiatives adopted by competitors within a particular industry might have socially important objectives, for example avoiding waste, companies should be very careful to ensure that they don't become a vehicle for prohibited anti-competitive co-ordination, for example on price. This can be a difficult tightrope to walk, although competition regulators have recognised the need for more guidance: the CMA has issued draft guidelines on environmental sustainability agreements and the Commission is expected to include similar guidance as part of general revised guidance on co-operation between competitors.

Brands should also be mindful that there is ongoing scrutiny over the accuracy of environmental claims made to consumers, and whether they could constitute prohibited "greenwashing". The fashion sector has also been targeted, with ASOS, Boohoo and Asda currently subject to an investigation by the CMA into whether potential greenwashing claims broke consumer protection law.

Whilst brand owners are understandably sensitive to environmental and sustainability issues, this is not a risk free area. Both co-ordination with other companies on initiatives and claims made to consumers can be targeted by regulators.

Luxury brands can seek advice on competition and consumer law issues to establish a path which achieves important environmental and sustainable goals without straying into prohibited territory.

Antitrust: Commission confirms unannounced inspections in the fashion sector


competition, commercial, fashion and luxury, retail