The fine that exposed luxury’s credibility crisis

In my research about the drivers of luxury, I could show that the reason why people pay price premiums is the anticipation of a positive perception shift through a luxury brand, whether a service or an item. We do not pay for the product itself, but for the effect it creates on our perception. It’s the concept of Added Luxury Value (ALV). This fragile construct that can collapse at any time. That is why trust is so critical. Once trust is lost, luxury loses its emotional power. And today, the cracks are beginning to show. Last week, the European Commission fined Gucci, Chloé, and Loewe a combined 157 million euros ($183 million) for anticompetitive pricing practices. The investigation found that the brands restricted independent retailers from setting their own resale prices, offering discounts, or deciding when to hold sales. These houses were accused of coordinating prices across channels and markets to preserve pricing coherence, a move the EU classified as resale price maintenance and a violation of competition law. However, what may look like a technical legal issue is, in truth, a question of trust. The foundation of luxury rests on credibility. A brand’s price must feel earned through its experience, craftsmanship, and cultural meaning. The moment clients sense that price is being enforced rather than justified, the emotional bond erodes. When clients no longer feel they are paying for intrinsic value, they feel taken advantage of. Warning signs This comes at a time when consumer confidence in luxury is already weakening. Bain & Company’s latest luxury study found that trust in luxury brands is declining, particularly among younger clients. The report noted that many consumers now perceive luxury prices as disconnected from tangible value and authenticity. The same study forecasted a possible contraction of the luxury market this year, citing a growing disillusionment with the value proposition. At the same time, controversies over supply chain transparency have further eroded credibility and created negative social media chatter. From allegations of forced labor in tanneries to questions about sustainability claims, luxury has become a category under investigation rather than pure aspiration. What brands underestimate is how social media amplifies these tensions instantly. Under posts summarizing the EU fines, the comments are sharp. “So all this time we’ve been paying for price fixing?” one person wrote. Another added, “Luxury is not about quality anymore. It’s about how much they can manipulate the system.” Others questioned whether paying full price for an item now feels like paying for market power rather than creativity. This public outrage exposes a deeper truth: When clients start doubting the integrity of what justifies the price, desire evaporates. The danger for luxury brands lies not in the fine itself, but in what it symbolizes. Once trust erodes, every touchpoint becomes vulnerable. A supply chain disclosure becomes a potential source of scandal. A pricing decision becomes a perceived manipulation. A high-priced collection launch is received with scrutiny instead of admiration. Luxury depends on emotional elevation, on the feeling that owning or experiencing something exceptional makes us feel more significant and alive. That emotion requires absolute confidence in the brand’s integrity. Why trust is luxury’s real competitive advantage Last week’s antitrust ruling mirrors how fragile luxury’s moral capital has become. In my work with global brands, I often emphasize that pricing power is always earned through meaning. Rebuilding trust will require a radical shift. Brands must show how they create extreme value. Clients today are highly educated, and social media provides more transparency than ever before. They understand what excellence costs. What they reject is opacity. Every client interaction must reinforce fairness, authenticity, and respect. Luxury must also rediscover its emotional leadership. Clients, even high net worth individuals, are fatigued by repetitive price hikes and uninspired storytelling. The answer is to obsess with creating higher meaning. Every product must carry a story that justifies its existence. Every client encounter must reinforce brand values and trust. Perception creates value — and destroys it The greatest paradox is that luxury’s strength lies in perception, yet perception can shift within hours. The same mechanisms that create desire can also destroy it. A single headline or comment can undo decades of brand building. Trust is not a soft concept. It is the new competitive advantage. It determines whether a price premium feels like privilege or manipulation. As luxury faces scrutiny on everything from supply chains to pricing, brands must focus on re-earning their right to charge a premium. In a world where perception is the product, trust is the ultimate currency. Lose it, and even the most iconic name will lose its value in no time. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders,” and advisor to some of the most iconic luxury brands in the world. He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts in-person masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others, Daniel holds an MBA and a Ph.D. in luxury management and has received education from Harvard Business School. Sign up for his online luxury masterclasses at the Jing Academy.

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The fine that exposed luxury’s credibility crisis