EU Opens Formal Probe Into US Clothing Company Guess Over Distribution Practices

By Natalia Drozdiak Features Dow Jones Newswires

European Union's antitrust authority said Tuesday it would an open an in-depth investigation into the distribution practices of Guess?, Inc. to see if the U.S. clothing brand was illegally restricting retailers from selling its products across borders in Europe.

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The European Commission said it would probe whether Guess' distribution agreements restrict authorized retailers from selling online to consumers or to retailers in other member states. The regulator said it would also look at whether Guess restricts wholesalers from selling to retailers in other member states.

"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," said EU antitrust chief Margrethe Vestager.

Consumers must be free to purchase from any retailer authorized by a manufacturer, including across national borders, the EU said.

The probe comes after the commission's competition directorate in May published the findings of its two-year long probe into the e-commerce sector. The EU then reiterated previous warnings that consumer-product makers and digital content owners could face antitrust probes for restricting the way retailers sell the companies' goods online.

In the report, the EU found that more than one in ten retailers complained of cross-border sales restrictions in their distribution agreements.

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Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

June 06, 2017 06:39 ET (10:39 GMT)