Farfetch / YOOX Net-A-Porter Group / Richemont
| Case Outcome | Mergers - phase 1 clearance |
| Date | 31 January 2023 |
| Decision Date | 31 January 2023 |
| Subject Matter | Mergers |
| Court | Competition and Markets Authority (EW) |
Acquisition by Farfetch of interest in, and
certain governance rights over, YOOX Net-a-
Porter Group from Richemont, in consideration
for the acquisition of a minority shareholding
by Richemont in Farfetch
Decision on relevant merger situation and substantial
lessening of competition
ME/7015/22
The Competition and Market Authority’s decision on reference under section 33(1) of
the Enterprise Act 2002 given on 29 March 2023. Full text of the decision published
on 31 May 2023.
Please note that [] indicates figures or text which have been deleted at the request
of the parties for reasons of commercial confidentiality. Figures may have also been
replaced by ranges at the request of the parties as a way to protect commercial
confidentiality.
SUMMARY
1. The Competition and Markets Authority (CMA) has found that the various
interconnected and interdependent transactions and commercial agreements
signed or agreed by Farfetch Limited (Farfetch) and Compagnie Financière
Richemont S.A. (Richemont) on 24 August 2022 to form an overall
partnership between them (the Partnership) do not give rise to a substantial
lessening of competition (SLC) within any markets in the United Kingdom (UK)
for goods and services.
2. The Partnership includes:
(a) the acquisition by Farfetch of a 47.5% shareholding in, and certain
governance rights over, YOOX Net-a-Porter Group S.p.A (YNAP) from
Richemont, in consideration for the acquisition by Richemont of a
minority shareholding in Farfetch;
2
(b) a technology partnership pursuant to which all luxury and fashion online
retailers operated by YNAP as well as various luxury and fashion brands
owned by Richemont will adopt the e-commerce and in-store technology
stack offered by Farfetch; and
(c) a marketplace partnership through which many luxury and fashion
brands owned by Richemont will become sellers on the Farfetch
Marketplace, a luxury and fashion marketplace operated by Farfetch.
3. Farfetch, Richemont and YNAP are together referred to in this decision as the
Parties, and for statements referring to the future, the Merged Entity.
4. The CMA believes that it has jurisdiction to review the Partnership, because
arrangements are in progress or in contemplation which, if carried into effect,
will result in the creation of a relevant merger situation. First, the CMA
considers that each of Farfetch, YNAP and Richemont is an enterprise and
that these enterprises will cease to be distinct as a result of the Partnership.
Specifically, the Partnership will enable Farfetch to materially influence
YNAP’s policy and strategic decisions and will also allow Richemont to
materially influence Farfetch’s policy and strategic decisions. Second, the
CMA considers that the turnover test (one of the jurisdictional thresholds set
of each of Farfetch and YNAP exceeded £70 million in 2022.
5. The CMA found that Farfetch (with Farfetch Marketplace, Browns and Stadium
Goods) and Richemont/YNAP (with Net-a-Porter, Mr Porter, YOOX and The
Outnet) operate websites and mobile applications on which UK consumers
can search for and purchase a range of personal goods (eg clothing, shoes,
accessories, jewellery and watches) from various luxury and fashion brands.
6. The evidence reviewed by CMA, such as the Parties’ internal documents and
information provided by fashion and luxury brands and competitors, indicates
that the websites and mobile applications operated by the Parties compete
closely with each other. However, the same evidence also indicates that the
Merged Entity will continue to face competition from a range of alternatives,
including other online websites and mobile applications selling a range of
personal goods from multiple luxury and fashion brands, the websites and
mobile applications of individual brands, as well as brick-and-mortar stores.
The CMA therefore believes that these constraints, taken together, are
sufficient to ensure that the Partnership does not give rise to a realistic
prospect of a SLC as a result of horizontal unilateral effects in the online retail
supply of personal goods from multiple luxury and fashion brands in the UK.
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