Three people with firsthand knowledge of the investigation told Reuters that EU antitrust authorities who raided Kering’s Gucci and other fashion companies in April are looking into how they set prices of handbags and leather items for distributors.

After Reuters reported the morning raid by the European Union on Gucci’s Milan manufacturing facility, Kering at the time declared that Gucci was working with the EU regulators.

Both Kering and the European Commission declined to comment.

At the time, the Commission, which did not identify the businesses it searched, said that they might have broken EU antitrust laws prohibiting cartels and restrictive commercial practises, but it did not elaborate.

According to one of the persons, the EU competition watchdog is looking into whether the businesses are imposing consumer prices on multi-brand retailers who sell their products and threatening to stop doing business with them if they do not comply.

According to EU antitrust regulations, such actions are prohibited, and violations can result in fines of up to 10% of a company’s global sales.

Guess, a U.S. clothing business, was fined 40 million euros ($43 million) in 2018 for blocking merchants from freely fixing the retail price of its goods.

(Adapted from ChannelNewsAsia.com)