The national competition authorities in several European countries have launched investigations targeting the cosmetics industry in particular.
In Greece, in its decision passed down on 4 October 2017, the Greek competition authority condemned L’Oréal Hellas to pay a fine of €2.6 million for carrying out anti-competitive practices in 2005-2006. L’Oréal Hellas refuted all allegations of having engaged in anti-competitive practices with other luxury cosmetics manufacturers. The Greek Administrative Court of Appeal quashed this decision on 5 November 2018. The Greek competition authority lodged an appeal in cassation against this decision on 28 January 2019 and a hearing before the Council of State, which was postponed on numerous occasions, was finally held on 17 November 2020. The decision should be handed down in the course of the first‑half of 2023.
In Germany, after the German competition authority filed a lawsuit in 2008 in the area of personal care products, which was definitively closed in 2015, distributors filed a lawsuit seeking damages against L’Oréal Germany which has resulted in dismissals by the courts at this stage. These proceedings are still ongoing. L’Oréal Germany is contesting the merits of these claims and denies that any damages occurred.
In France, on 18 December 2014, the French competition authority handed down a fine of €189.5 million against L’Oréal in the hygiene products sector for events that took place in the early 2000s. On 27 October 2016, the Paris Court of Appeal upheld this first instance decision. L’Oréal refutes all accusations of concerted practices with its competitors and regrets that the French competition authority did not take into account the highly competitive French market in household and hygiene products as illustrated by the number of manufacturers and retailers present on the market, the large choice of products available to consumers, and the high degree of innovation and number of product launches.
Following an appeal lodged by L’Oréal, on 27 March 2019, the Court of Cassation partially overturned the ruling relating to the amount of the fine imposed on L’Oréal. On 18 June 2020,the Second Court of Appeal confirmed the initial amount of the fine. L’Oréal lodged a second appeal with the Court of Cassation against this ruling. The decision should be handed down down in the course of the first-half of 2023.
It should be noted that since the appeal and Cassation appeal do not entail a stay in the judgement, the fine provisioned at the end of 2014 was paid on 28 April 2015.
At 31 December 2022, the provision was maintained in liabilities and the payment recognised in Other current assets.
Following this ruling, the distributors filed lawsuits for damages against L’Oréal. These proceedings are in initial stages or resulted in dismissals by the courts. These proceedings are still ongoing. L’Oréal contests the merits of these claims and denies that any damages occurred.
A provision has been set aside for all disputes still in progress at 31 December 2022 amounting to €192.2 million at year-end unchanged from the provision at end-2021 and end-2020.
At the present time, no other exceptional events or disputes are highly likely to have a material impact on the earnings, financial situation, assets, or operations of the Company or the L’Oréal Group.
