LVMH may have just won a landmark case against eBay, but now their beauty division’s in hot water in Germany -
According to WWD, there was something of a beauty cartel in Germany up until recently, called “Schlossrunde,” which means “elite circle.” It consisted of quarterly meetings since 1995 between the German subsidiaries of LVMH Perfumes and Cosmetics, Chanel, Estée Lauder, Clarins, L’Oréal, Coty Prestige Lancaster, Shiseido, YSL Beauté and Cosmopolitan Cosmetics Prestige (now called P&G Prestige Products) for the purpose of collusion and price-fixing.
Translation: They would meet often to discuss who was charging what for which product, so they could raise prices in conjunction with each other to get you, me, and everybody else to pay as much as possible for their products without losing customers to each other.
They also shared information like how much each paid for advertising, to make sure they weren’t getting screwed by other companies themselves. Basically, it was like a luxury beauty union, but an illegal one.
Germany’s Federal Cartel Office is fining each company somewhere between $400,000 and $3.3 million, depending on who you are and what you did, though L’Oréal is appealing their fine, saying they weren’t involved at all.
We think this could make a kind of funny beauty thriller movie, but more pressing: Was this only happening in Germany?