- EC Imposes Fines for Resale Price Maintenance
- UK CAT Upholds Claim Against Apple: First UK Collective Action to Succeed at Trial
- Challenge Against UK Grant Links Competition, Procurement, Subsidy Control and Public Law
- Highest EU Court Rules on Object Restrictions and Pharma Pay-for-Delay
EC Imposes Fines for Resale Price Maintenance
On 14 October 2025, the European Commission (EC) announced fines on three fashion companies for online and offline resale price maintenance (RPM) in breach of EU competition law. Each of the activities identified by the EC is well understood to be an infringement, and the case shows the continuing risk in this area.
The companies involved, Gucci, Chloé and Loewe, are active in the design, production and distribution of high-end fashion products, including apparel, leather goods and accessories.
The EC found that each company restricted the ability of its online and brick-and-mortar retailers — independent resellers — to set their own retail prices in the European Economic Area. This covered most of the products designed and sold by the fashion houses under their respective brand names.
In particular, the companies required their retailers not to deviate from recommended retail prices, maximum discount rates or specific periods for sales. In certain cases, they also prohibited retailers from offering any discounts. To ensure compliance with their pricing policies, the suppliers monitored retailers’ prices and followed up with any that deviated.
The overall intent was that the independent retailers would apply the same prices and sales conditions the fashion houses applied in their own direct sales channels.
Previous case law and the EC’s guidelines on vertical restraints are clear these practices amount to RPM and are illegal. Fines are regularly imposed for their use. The decision provides a textbook example and is a useful competition compliance tool.
UK CAT Upholds Claim Against Apple: First UK Collective Action to Succeed at Trial
The UK Competition Appeal Tribunal (CAT) handed down a landmark judgment on 23 October 2025 when it found against Apple in a case concerning its App Store.
The case was a collective (class) claim for infringement of EU and UK competition law brought by a class representative (CR) on behalf of around 36 million UK users (individuals and businesses) of iPhone or iPad devices that made a purchase in the UK App Store between certain dates. As an opt-out claim, all relevant users were automatically included and bound by the judgment unless they chose to opt-out. A funder paid for the case under a litigation funding agreement.
The CAT, agreeing with the CR on all the main issues, found that Apple holds a dominant position in two markets, iOS app distribution services and iOS in-app payment services, “having near absolute market power in both.”
According to the CAT, Apple abused its dominant positions by imposing restrictions that foreclosed competition. Users could only access iOS apps through the App Store and make iOS app and in-app purchases only with Apple’s payment systems. Apple engaged in a further abuse by tying the use of its payment system for in-app purchases to its App Store.
The CAT further found Apple abused its dominant positions by charging excessive and unfair prices in the form of the commission it charges developers for iOS app distribution services and iOS in-app payment services.
Activities that are otherwise abusive are not illegal if they are objectively justified, either as objectively necessary to achieve a certain aim (objective necessity defence) or on the basis that they create efficiencies outweighing the anticompetitive effects (efficiencies defence). Apple argued its actions were legitimate on the basis that they (i) benefitted users in terms of safety, security and privacy; (ii) benefitted users in terms of enhanced performance; (iii) differentiated iOS devices and services and promoted competition on the merits; and (iv) ensured an efficient system for the collection of its commission.
The CAT rejected the objective necessity defence on the basis that the relevant restrictions were not necessary to provide the argued benefits to users and, moreover, were not proportionate to the objective of delivering those benefits. It rejected the efficiencies defence on the basis that the conduct eliminates effective competition on the relevant markets. Apple therefore failed in both its arguments justifying its abusive conduct.
The CAT went on to lay down principles for calculating damages due to the users. The level of overcharge developers suffered in respect of the infringements concerning iOS app distribution services is the difference between a commission set at 17.5% and the commission charged by Apple (typically 30%). The level of overcharge developers suffered in respect of the infringements concerning iOS in-app payment services is the difference between a commission set at 10% and the commission charged by Apple (again, typically 30%). Further, developers passed on 50% of these overcharges to iOS device users (the class represented by the CR).
The CR, for the users, is entitled to damages for the total amount of these overcharges that were passed on, plus interest at a simple rate of 8%.
Damages will be calculated on this basis, and the amount is not yet known. However, the CR stated “The decision paves the way for £1.5 billion in compensation to be returned to nearly 36 million UK consumers and businesses,” which suggests, at most, a payment of around £42 to each user.
Challenge Against UK Grant Links Competition, Procurement, Subsidy Control and Public Law
The UK Subsidy Control Act (SCA), which came into effect on 4 January 2023, established a system of public subsidy oversight and control within the UK to replace the EU state aid regime, which the UK is no longer subject to following its exit from the EU. Only interested third parties can bring challenges to subsidies before the CAT, and there is no regulatory enforcement mechanism.
To date, two cases have been heard under the act, both decided in favour of the public authority (loans granted by the Greater Manchester Combined Authority and the award of waste collection services by Durham County Council). Notices of appeal have been submitted in two further cases (The New Lottery Company appeal of an alleged subsidy to Camelot UK Lotteries and Bristol Airport appeal of an alleged subsidy to Cardiff International Airport).
Subsidy (and EU state aid) cases can raise linked competition and procurement law issues. A case filed on 21 October 2025 by various claimants before the CAT against the allocation of regeneration funding and related grants by Durham County Council (DCC) to third parties (including STACK and The Auckland Project) shows this link.
The claimants stated that since 2021 they engaged with DCC regarding regeneration funding. One claimant obtained and was paid an award to regenerate one property and allegedly acquired further properties based on representations that additional grants would be available. DCC agreed to fund grants for projects proposed by the other claimants. These further sums were not paid, allegedly causing financial loss. Meanwhile, several awards were made to STACK and The Auckland Project for various projects.
Formally, the case was brought under the Competition Act 1998 (CA), which bans anticompetitive agreements and abuse of dominance in the UK. The principal claim is that DCC’s selective subsidies conferred economic advantages on STACK and The Auckland Project, distorting competition in local hospitality, leisure and cultural markets, contrary to the CA.
The claim further alleges that the awards amount to a subsidy and are not justified under the SCA. Further, it is alleged that DCC’s failure to conduct any open or transparent process for allocating this funding was contrary to the UK public procurement rules, which require fair and transparent tendering for public contracts.
Finally, claimants argued that DCC infringed public law principles by using an opaque process, failing to publish eligibility criteria and refusing to allow presentations from competing operators. Its decision to award grants to STACK and The Auckland Project was so unreasonable that no reasonable person acting reasonably could have made it (known as “Wednesbury” unreasonableness).
The claimants seek a declaration that the awards to STACK and The Auckland Project constitute unlawful subsidies and breach competition and procurement law. They also seek compensation for loss, an order requiring recovery of the unlawful subsidies and an order requiring any future regeneration funding be awarded in a transparent and competitive manner.
The number of cases under or raising the SCA is below the number estimated when the act was adopted (23 per year). For several reasons, not least adverse costs risk, private parties have proven reluctant to bring cases.
The EC enforces EU state aid law (alongside claims in national courts), and the UK’s decision not to create an equivalent power for the UK Competition and Markets Authority under the SCA was a surprise to many in the EU. There now seems to be pressure for change. The EU’s statement on 28 October 2025 at the start of the first Trade Policy Review of the United Kingdom included this comment: “[T]he EU considers that it is vital to enhance the effectiveness of the United Kingdom’s subsidy control system to ensure a level playing field in particular with the EU, given our close and important trading relationship.”
Highest EU Court Rules on Object Restrictions and Pharma Pay-for-Delay
On 23 October 2025, the EU’s highest court, the European Court of Justice (ECJ), handed down the latest judgment at the EU level concerning the application of EU competition law to reverse payment patent settlement agreements (so-called “pay-for-delay” agreements). The case is important because it considers and confirms again the principles to be used when analysing such agreements.
The case originated with the EC’s 2020 decision fining Teva and Cephalon for agreeing to delay for several years the market entry of a cheaper generic version of Cephalon’s drug for sleep disorders, modafinil, after Cephalon’s main patents expired. The EC found Cephalon induced Teva not to enter the market in exchange for cash payments and a package of commercial side-deals. Teva was a potential competitor because it held its own patents relating to modafinil’s production process, was ready to enter the modafinil market with its own generic version and had started selling it in the UK, an EU member state at the time.
The two companies appealed to the EU General Court, which rejected the action in full in October 2023.
On further appeal, the ECJ considered arguments made by the companies about the relevant legal test to use in this type of case to establish that their agreement gave rise to a restriction of competition by “object” for the purpose of the relevant EU law provision banning anticompetitive agreements. Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) bans restrictions that have as object or effect the prevention, restriction or distortion of competition in the EU. A restriction classified as by object automatically comes within Article 101(1) TFEU and is unlikely to be exempted under Article 101(3) TFEU.
The court held that settlement agreements of this type should be classified as by object restrictions when it is clear from examining them that a payment or other transfer of value made by the manufacturer of the originator medicine (in this case Cephalon) to the manufacturer of the generic medicine (Teva) has as its sole explanation the commercial interest of those operators not to engage in competition on the merits. This is the case when a value transfer made by the originator is more than what is necessary to resolve the dispute or remunerate goods or services and, instead, compensates the generic manufacturer for staying off the market. The whole arrangement between the companies needs to be examined, not just individual clauses.
The ECJ also expressly confirmed that, if a by object restriction is found, there is no need to demonstrate actual or potential effects on competition. The anticompetitive object and anticompetitive effect of an agreement are not cumulative but alternative conditions for applying the prohibition in Article 101(1).
The ECJ dismissed the appeal and upheld the EC’s original decision.
Additional EU and UK competition law news coverage can be found on McGuireWoods’ Insights page. McGuireWoods also publishes legal alerts on U.S. antitrust developments and numerous other topics.