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Guess slapped with €40 million fine for geoblocking

The European Commission has fined Guess €39,821,000 for restricting the sales of its goods cross-border to consumers in other European member states.

The American fashion brand imposed online advertising and sales restrictions on retailers, which was a breach of EU competition rules.

Guess distribution agreements tried to prevent EU consumers from shopping in other Member States by blocking retailers from advertising and selling cross-border,” said the commissioner in charge of competition policy, Margrethe Vestager. “This allowed the company to maintain artificially high retail prices, in particular in Central and Eastern European countries.”

The Commission discovered that customers in countries including Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia were impacted by the geo-blocking restrictions and forced to pay 5-10% more for Guess products than those in Western Europe.

Under EU law consumers must be free to purchase from any retailer authorised by a manufacturer, including across national borders.

The €40 million figure was in fact 50% of the total fine, but the Commission stated that it reduced the amount because Guess cooperated “beyond its legal obligation to do so”.

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