The German clothing company Ahlers has failed in its lawsuit against a fine of millions from the European Union. The General Court of the European Union confirmed on Tuesday the fine of 3.5 million euros imposed by the EU Commission for anti-competitive distribution restrictions on Pierre Cardin brand products, according to the ruling in the case “Westfälisches Textilwerk Adolf Ahlers v. Commission”.
The penalty was part of broader competition proceedings by the European Commission against Pierre Cardin and its largest licensee Ahlers. The authority had already imposed fines totaling 5.7 million euros on both companies in November 2024.
According to the Commission, between 2008 and 2021, the companies entered into agreements that restricted the cross-border sale of Pierre Cardin products within the European Economic Area.
The EU Commission accuses Ahlers of ‘targeted fragmentation of the European internal market’
According to the commission, the focus was on territorial sales restrictions, which were intended to prevent other licensees or their dealers from selling Pierre Cardin goods outside of their assigned markets. Both stationary and online sales were affected. The EU Commission viewed this as a deliberate fragmentation of the European internal market.
As can be seen from the judgment, Ahlers’ lawsuit did not focus on the determination of the antitrust violation itself, but only on the amount of the fine. In particular, the company disputed the calculation of the turnover cap in accordance with Article 23 of the EU Antitrust Regulation. Ahlers argued that the sales of the subsidiary Ahlers AG should no longer have been taken into account because its operational business had already been transferred to an independent investor in July 2023 as part of insolvency proceedings.
However, the court did not follow this argument. The judges found that Ahlers and Ahlers AG formed a “single economic unit” during the relevant period and until the transfer of business activities. What was crucial was that the parent company continued to exercise significant influence on the subsidiary. The Commission was therefore legally allowed to include the consolidated group turnover between December 2022 and July 2023 in the calculation of the fine.
Economic situation becomes the central question
The court dealt in particular detail with the question of which business period is relevant for calculating the ten percent upper limit of an antitrust penalty. According to the judges, the Commission was allowed to use the financial year from December 1, 2022 to November 30, 2023, as this best reflected the company’s actual economic situation during the infringement period. According to the court, if companies were allowed to change their economic structure shortly before a decision in order to reduce the assessment basis for fines, this could significantly weaken the deterrent effect of European competition law.
The Commission had also already taken the company’s economic situation into account in the original procedure. Due to the insolvency of Ahlers AG, the originally planned penalty was reduced by around 66 percent and ultimately set at 3.5 million euros. The authority also approved payment in several installments until 2028.
Ahlers can still appeal the ruling to the Court of Justice of the European Union.