EU antitrust regulators who raided Kering’s Gucci and other fashion firms in April are looking into how they set prices of handbags and leather goods for distributors, three people with direct knowledge of the matter told Reuters.

Kering confirmed at the time that Gucci was cooperating with the EU regulators after Reuters previously reported the European Union dawn raid on its site in Milan, which makes such products.

The European Commission and Kering declined to comment on Monday.

The Commission, which did not name the companies it raided, said at the time that they may have breached EU antitrust rules against cartels and restrictive business practices but did not provide details.

The EU competition watchdog is investigating whether the companies are imposing consumer prices on multi-brand retailers selling their products and threatening not to sell to them if they do not respect these prices, one of the people said.

Such practices are illegal under EU antitrust rules, and breaches can lead to fines up to 10 percent of a company’s global turnover.

US clothing company Guess was hit with a €40 million ($43 million) fine in 2018 for preventing retailers from setting the retail price of its products independently.

By Foo Yun Chee and Emilio Parodi

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Gucci Milan Site Inspected in EU Antitrust Inquiry

European Union antitrust regulators have started inspecting a facility of luxury goods company Gucci as part of an EU investigation spanning several countries, Gucci’s French owner Kering said on Wednesday, confirming a Reuters report.