ANTITRUST P OLICY

— Contents

1. INTRODUCTION

3

2. OBJECTIVES

3

3. SCOPE OF THIS POLICY3

3.1. Application of this Policy by Group Companies

4. DEFINITIONS

4

5. GENERAL PRINCIPLES AND RULES
OF CONDUCT

65.1. Prohibition on restrictive agreements
5.1.1. Horizontal restrictions of competition
5.1.2. Vertical restrictions on competition
			 i Prohibition on resale price fixing
			ii Prohibition on online sales
			iii Territorial or customer restrictions
5.1.3. Other possible vertical or horizontal agreements
			 i Franchise agreements
			ii Dual distribution
			iii Agency agreements
5.2. Abuse of dominant position
5.3. Merger control
5.4. Abuse of economic dependence

6. IMPLEMENTATION OF THIS POLICY

15

6.1. Antitrust Officer
6.2. Antitrust risk assessment
6.3. Prada Group Personnel training
6.4. Support and assistance

7. REPORTS

17

8. BREACH OF THIS POLICY

18

8.1. Disciplinary action
8.2. Contractual remedies

9. MONITORING AND CONTINUOUS
IMPROVEMENT

18

— 1. Introduction
The Prada Group is fully aware of the negative impactthat anticompetitive (antitrust) practices can have on
the economic and social development of the areas inwhich it operates and is thus committed to preventing
and combatting anticompetitive conduct in theperformance of its business, in accordance with theapplicable national and international regulations.
Antitrust Legislation now plays a key role in regulatingcompanies that operate in a variety of sectors.
Therefore, to ensure full compliance, and given that
Prada S.p.A., the Group’s operating holding company,
is mainly subject to EU regulations, the PradaGroup has based this Policy on the principles of EU
antitrust regulations, which represent an international
benchmark.
Specifically, the need to adopt a policy aimed atdisseminating an antitrust culture throughout theGroup is also due to the fact that antitrust authorities
conduct close monitoring through inspections (dawnraids) and take severe measures (public enforcement)in the event of non-compliance with competition rules.
Breaches of these rules therefore expose the Groupto the risk of very significant penalties – up to 10%of the Group’s turnover under EU law – or damages
claims by parties harmed by anticompetitive practices(private enforcement).
Furthermore, in some cases, and depending on thejurisdiction in which the anticompetitive conduct
occurs, the managers and/or employees who materially
carried out the unlawful conduct can be subject topersonal administrative and criminal penalties.

— 2. Objectives
For the Prada Group, prevention of anticompetitive
practices and compliance with the general legal andregulatory framework are two of the principles basedon which the Group operates/its core principles, inline with the general principle of legality enshrined
in its Code of Ethics, which sets out the values thatinspire the Group to achieve its objectives and therelated principles in the conduct of its business.

ANTITRUST POLICY

In introducing this Policy, the Prada Group thus setsout in an organic and unified framework the principles
and rules of Italian and EU regulations and all therules of conduct already in place within the Group toprevent and combat anticompetitive practices, withthe aim of further increasing Addressees’ awarenessof the rules to follow and the conduct to adopt.
This Policy is to be applied by all Prada Group
Companies in the countries where the Group operates.
It provides each Group Company with a usefulreference framework for [identifying and achieving
the objectives for] preventing the anticompetitive
practices mentioned in this Policy and in applicablelegislation, thereby consolidating compliance with theprinciples protecting competition.

— 3. Scope of this Policy
This Policy is issued by Prada S.p.A., in its capacity as
the Group’s parent company, and must be applied by
all Group Companies, with any adjustments necessary
to comply with applicable local regulations, as further
specified in section 3.1 below.
All Addressees are required to comply with Antitrust
Legislation and this Antitrust Policy.
If any provisions of Antitrust Legislation are stricter
than those set out in this Policy, the provisions of
Antitrust Legislation must still be complied with, andany breach of Antitrust Legislation will constitute a
breach also of this Policy.

3.1. Application of this Policy byGroup Companies
Every Group Company, whether Italian or foreign, is
required to comply with this Policy.
If a Group Company needs to adapt this Policy tocomply with national regulations, Prada must be
informed of and approve any such adaptation inadvance.
Each Group Company may adopt all additional
prevention and control tools necessary to mitigate its

3specific risks and regulate the specific processes of
its operations, taking into account the applicable legal
and operational regulations.
This Policy will come into effect for all Group
Companies upon its publication on the Prada Group’s
intranet and company website.

— 4. Definitions
For the purposes of this Policy, the below terms havethe following meanings:

information on prices, discounts, promotions,production volumes and costs, and sourcesof supply; industrial, logistical and production
information; and information relating tocustomers’ identity and advertising.

— Antitrust Legislation: The national and EU

regulations applicable to Prada and the Group
Companies and the best practices and guidelines
developed by the national antitrust authorities,
including but not limited to the following:―— Code of Ethics: The Prada Group’s code of ethics

published on the Prada Group’s company website.

— Ethics Committee: Body responsible formanaging reports received through the specificreporting channels. The Ethics Committee
proposes possible improvements to theprocess to the Control and Risk Committee
and encourages the necessary information andtraining for the Company’s employees.

――— Audit and Risk Committee: A committee formed

within the Board of Directors responsible forsubmitting proposals and providing advice tothe Board of Directors. The Audit and Risk
Committee’s main tasks are to assist the Boardof Directors set the guidelines of the internal
control and risk management system and assess
the system’s adequacy at least once a year. In
relation to the whistleblowing system, the Audit
and Risk Committee ensures that procedures arein force to guarantee that confidential reports
are examined with impartiality.

— Addressees: The Prada Group’s personnel

worldwide and anyone who operates in the name,on behalf or in the interest of the Prada Groupor who has professional or commercial relations
with the Prada Group, wherever they carry out
their activities.

—

Prada Group or Group Companies: Prada andthe companies of the Prada Group.

— Sensitive Information: Commercial, strategic
information concerning the Group, e.g.,

ANTITRUST POLICY

―
―
―
―
―
―
―

Commission Regulation (EU) 2022/720 on
the application of Article 101 of the Treaty
on the Functioning of the European Union
to categories of vertical agreements andconcerted practices (also known as the“[New] Vertical Block Exemption Regulation”
or “[New] VBER”)
Communication from the European
Commission (2022/C 248/01), Guidelines
on Vertical Restraints
Treaty on the Functioning of the European
Union (TFEU) of 13 December 2007,
Articles 101–109
Council Regulation (EC) No 139/2004 on
the control of concentrations between
undertakings
Council Regulation (EC) No 1/2003 on theimplementation of the rules on competition
laid down in Articles 81 and 82 of the Treaty
Italian Law No. 287 of 10 October 1990 –Rules on the Protection of Competition and
the Market
Sherman Antitrust Act of 2 July 1890 (US)Competition Act of 9 November 2008
[online references are to 1998] (UK)
Anti-monopoly Law of 1 August 2008 (China)
Act on Prohibition of Private Monopolizationand Maintenance of Fair Trade of 14 April
1947 (Japan)

4

―
―

—

Monopoly Regulation and Fair Trade Act of
29 March 2016 (South Korea)
Competition Ordinance of 14 December
2015 (Hong Kong)

Management and Supervisory Bodies: The
Supervisory Body, the Board of Statutory
Auditors and the Audit and Risk Committee, if
established, of each Group Company.

— Prada Group Personnel: Employees andconsultants of Prada and Group companies(executives, middle managers, white-collar
employees, and blue-collar employees).

— Policy: This Antitrust Policy [adopted by Prada].
— Prada: PRADA S.p.A.;— Recommended Prices: The final prices of the

products applied by the Prada Group in its
boutiques and recommended to Authorised
Resellers, Distributors and franchisees, in order
to inform them of the products’ positioning in
the target market, with a view to preserving the
products’ aura of luxury.

— Reported Individual: Any individual to whom thefacts that are the subject of a Report refer or canbe referred.

— Report: A report concerning conduct, acts,

omissions, or practices in potential breach of thisPolicy or Antitrust Legislation.

— Group Company: Each company directly or
indirectly controlled by Prada S.p.A.

— Third Parties: Authorised Resellers, Retailers,
Distributors, and/or Suppliers of the PradaGroup.

— Relevant Third Parties: The parties with which

the Prada Group has relations that risk being
involved in anticompetitive conduct or practices
or being instrumental to the implementation,
facilitation or concealment of anticompetitive
conduct. These parties include, but are notlimited to, Third Parties, companies that operate
in the same market, competitor companies,business partners, professionals, consultants andbusiness promoters in various capacities.

— Manufacturer or Supplier: A company that

manufactures, imports or acts as a wholesaler or
principal (the latter under an agency agreement).

— Antitrust Officer: The person appointed by Prada

to ensure this Policy is lawful and to update andinterpret the applicable regulations referred to in it.

— Resellers: Individuals and companies thatpurchase products from Suppliers for subsequentretail (“Retailers”) or wholesale (“Distributors”).

— Authorised Reseller: A legal entity authorised by

Prada to resell Prada products exclusively to final
customers and other Authorised Resellers, which
are selected based on specific criteria identified
by Prada and in compliance with the Quality
Standards for Authorised Resellers.

— Whistleblower: Any person – whether internalor external to the Prada Group – who submits aReport.

ANTITRUST POLICY5— 5. General principles
and rules of conduct
The antitrust framework envisages three macro areasof intervention to combat anticompetitive practices:(i) restrictive agreements, (ii) abuse of a dominantposition by an undertaking that holds market powersuch that it is able to act independently from its
competitors and final customers, and (iii) merger
control.

5.1. Prohibition on restrictive
agreements
In light of Italian and EU legislation and legislation
in force in the countries where the Prada Group
operates, agreements between companies, concerted
practices and decisions by associations of companies
concerning the prevention, restriction or distortion ofcompetition are prohibited.
However, agreements can be entered into between
two or more competing undertakings (horizontal
agreements) or between undertakings at different
levels of the economic chain, e.g., a Supplier, aDistributor and/or a Retailer (vertical agreements).

5.1.1. Horizontal restrictions of competition
Horizontal agreements are typically considered more
harmful to competition than vertical agreements
because they are more likely to unduly distortcompetitive dynamics to the detriment of consumers.
The most serious forms of horizontal agreements are
the following:— i - Price fixing: This includes fixing current

or future prices, discount levels, criteria forobtaining discounts, price increases, timing ofprice increases, profit margins, sales conditions,and payment terms.

— ii - Market sharing: This involves reciprocal

allocations of territories or target customer
groups, e.g., an agreement whereby the parties
undertake not to sell to or target each other’scustomers.

ANTITRUST POLICY— iii - Exchange of Sensitive Information withcompetitors: This involves an exchange – inwhatever form – of information relating to,e.g., prices, discounts, promotional campaigns,
production volumes and costs, sources ofsupply, customer identity, and commercial andadvertising investment strategies.

Rules of conduct concerning relations
with competitors (horizontal agreements)
In light of the principles described above, and toensure compliance with antitrust legislation, allPrada employees/Addressees should abide by thefollowing rules of conduct.
Examples of prohibited conduct:— a - discuss, negotiate or enter into

agreements of any kind (formal orinformal, binding or non-binding, etc.) withcompetitors aimed at coordinating eachparty’s commercial policies to be adopted on
the market.

— b - exchange sensitive information withcompetitors that could reduce uncertainty
as to Prada’s current or future market
behaviour (through meetings, formal orinformal dealings, email, unilateral publicannouncements, with Third Parties such as
customers or Suppliers, etc.).

— c - disclose Prada’s Sensitive Information tocustomers or Suppliers (including Relevant
Third Parties) as they might then pass it on tocompetitors. To mitigate the risk of violating
Antitrust Legislation, do include the wording“Privileged and Confidential” in documentsthat contain the commercial conditions that
the Prada Group applies to its customers(price lists, offers for specific projects, etc.).

— d - expressly ask Third Parties for

information on the contractual conditions
applied by a competitor. This does notpreclude spontaneously receiving thiskind of information from Third Parties as

6part of negotiations aimed at obtaining
more favourable contractual conditions
than those initially offered. However, ininternal communications or archived
files, it is advisable to always indicate thesource of information on competitors
spontaneously acquired from Third
Parties (name of the customer or Supplierthat provided the information, date,context, etc.), so that it is possible toprove, if necessary, that no information
was exchanged (including indirectly) witha competitor.

— e - publicly announce the Prada Group’s
medium-long term strategies, especiallywhen they will be adopted a long timeafter the announcement and when they
could be detrimental to consumers (e.g.,
price increases).

— ii - the prohibition on online sales (see section
5.1.2.ii) (with the exception of the US, forexample); and— iii - territorial and customer restrictions (seesection 5.1.2.iii) (subject to certain exceptions
relating to the adoption of selective andexclusive distribution systems).

Further potentially anticompetitive practices:
The imposition of the following contractual obligations
could also constitute prohibited anticompetitive
practices:— a - a direct or indirect non-competition

obligation whose term exceeds 5 years or isindefinite;— b - a direct or indirect obligation that prevents

the Reseller from producing, purchasing, sellingor reselling certain goods or services after theagreement terminates; and5.1.2. Vertical restrictions on competition
Vertical agreements regulate the purchase or sale ofgoods or services between undertakings that operate
at different levels of the production or distribution
chain (e.g., franchise agreements, resale contracts,and distribution contracts).
Vertical agreements are treated more favourably
than horizontal agreements and are generally notconsidered restrictive of competition. In several
jurisdictions, including the EU, vertical agreements
are presumed to be lawful if the market shareof the Supplier or Reseller in the relevant market
covered by the agreement remains below a certain
threshold set by the applicable legislation (30% in
the EU) on condition that the agreements do notcontain restrictions that are considered particularly
anticompetitive regardless of the parties’ market
share/s (hardcore restrictions).
The following practices are considered hardcore
restrictions and are therefore absolutely prohibited:— i - resale price fixing (see section 5.1.2.i);
ANTITRUST POLICY— c - a direct or indirect obligation on themembers of the selective distribution system not
to sell the brands of certain competing Suppliers.

The lawfulness of the above types of obligationmust be assessed on a case-by-case basis, in light ofseveral factors (the market shares of the parties andcompetitors, the nature of the product, the existenceof additional restraints, etc.), to determine whether the
anticompetitive effects resulting from the obligations
can be outweighed by efficiencies resulting fromthe restraint or whether the competitive effect is so
negligible as to have no real impact on the market.

—

i - Prohibition on resale price fixing

Suppliers cannot impose a fixed and/or minimum
resale price on distributors for products supplied
either directly or indirectly.
Resellers must always be free to determine theresale price of purchased products independently,
without any constraints from Suppliers.
However, Suppliers may still recommend a list of
Recommended Prices on condition that this does not7result in the imposition of fixed or minimum resale
prices (e.g., as a result of pressure or incentives).

Exceptions to the prohibition of online sales apply incertain countries, including the US, where online sales
may be reasonably prohibited.

Examples of prohibited conduct:――a - prohibiting Resellers from sellingpurchased products online;―b - obliging Resellers to obtain
authorisation from the relevant Supplier foreach online transaction;b - making verbal or written (email, chat,voice or video messages, etc.) threatsagainst Resellers to fully or partiallyterminate contractual relations or threatsof other negative consequences for
deviating from the imposed or suggested
resale prices;―c - preventing Resellers from promoting
products online, including on social media;―

d - prohibiting the use of their own brandtogether with the product category or
product name as a keyword for offers to beindexed by search engines;―c - making verbal or written communications (email, chat, voice or video messages,etc.) that directly or indirectly draw Resellers’ attention to any deviation between theprices charged and the prices suggested by
Manufacturers;――

d - imposing restrictions on Resellers
to apply discounts or limits to discountpercentages; ande - prohibiting advertising through the mostwidely used price comparison services(e.g., Google Shopping, Kelkoo and Meta
Marketplace) because they attract a larger
number of users as they are among the best
known and most easily reached by users
through an online search and therefore
have a high ranking in the sector in terms ofvisibility and public reputation; and―e - envisaging or granting discounts and/or incentives specifically to Resellers thatcomply with a Recommended Price.

―f - imposing geo-blocking practices on
Resellers within the EU, i.e., practices that:(i) block or restrict consumer access to a
website based on a consumer’s nationality
or place of residence; (ii) redirect consumers
automatically to another version of thewebsite without their express consent; and(iii) discriminate based on payment method.

―—

Examples of prohibited conduct:a - including contractual provisions on
how final prices are to be determined andenvisaging possible negative consequencesin the event of non-compliance withimposed or suggested resale prices(interruption of supplies, non-recognition of
discounts, etc.);

ii - Prohibition on online sales

In light of Italian and EU regulations and those
applicable in other non-EU countries where the PradaGroup operates, Suppliers must not unjustifiably
restrict the freedom of Resellers to sell products
purchased online. More precisely, any conduct
whereby the Supplier prevents a Reseller – either
directly (e.g., by inserting a contractual provision)or indirectly (e.g., by threatening termination ofcontractual relations and by intimidation) – from using
the internet is generally considered unlawful.

ANTITRUST POLICY

Examples of Suppliers’ permitted conduct:―a - prohibiting resale on marketplaces(marketplace ban) that Suppliers have notauthorised in advance, on condition that
Resellers are free to operate their own
e-commerce and to advertise online, in linewith the Quality Standards for Authorised
Resellers;

8

―

—

b - applying different prices to Distributors
or Retailers depending on whether the
products are intended to be sold online
or offline (dual pricing), on condition that
this does not prevent them from selling
products online;―c - requiring online sales to be in accordancewith certain quality criteria, on condition
that these criteria are proportionate and do
not result in it being de facto impossible tosell products online;―d - conditioning the possibility of online
sales on the circumstance that Distributors
have at least one brick-and-mortar outlet(thereby prohibiting purely online players);―

e - obliging Resellers to sell an absolute
minimum quantity (in terms of value orvolume) of products offline in order toensure the efficient operation of the brickand-mortar shop;―

f - prohibiting advertising through a specificprice comparison service (e.g., Google
Shopping, Kelkoo and Meta Marketplace)unless it is one of the most widely used on
the market;―

g - prohibiting the use of a Supplier’s brandname in the domain name of Resellers’
websites; and―h - prohibiting Resellers from: (i) using
expressions such as “(Official Site/Store/Boutique/Shop/e-shop/e-commerce) Official” toavoid creating confusion between the brandowner’s site and each Reseller’s site; (ii) using
registered brand symbols such as ™©® inrelation to the Prada Group’s brands so that
Resellers do not commit brand counterfeiting; and (iii) indicating the brand name inblock letters so as not to debase its prestige.

iii - Territorial or customer restrictions

As a general rule, Suppliers must not prohibit Resellers
from selling products in certain territories or tocertain types of customers (e.g., to another Distributor

ANTITRUST POLICY

or Retailer or to a party that does not meet certain
requirements), subject to the following exceptions.
In the EU, Resellers must be free to sell to whomever
they prefer, regardless of the quality or business ofeach individual customer or the customer’s location.
However, under EU law, territorial and customer
restrictions are permitted within certain limits if the
Manufacturer in question has adopted an exclusive or
selective distribution system.
A - Exclusive distribution system
Through an exclusive distribution system,
Manufacturers can restrict the sale of products
in certain territories or to certain categories
of customers to themselves or to one ormore Distributors (shared exclusivity), while
simultaneously prohibiting other Distributors
from actively selling in those territories or tothose customers (i.e., actively promote theresale of their products to potential buyers
through targeted advertising actions). However,
Manufacturers cannot restrict Distributors’
passive sales, which are sales made in responseto spontaneous consumer requests not actively
solicited by the Distributor.
B - Selective distribution system
A selective distribution system is traditionallyadopted to resell products that are technologicallycomplex or viewed on the market as prestigious.
With this type of distribution system,
Manufacturers create a ‘closed’ distribution
network to which only Distributors that meetcertain qualitative/quantitative criteria areadmitted (authorised distributors).
In the EU, the selection of Authorised Resellers
can be made only based on the following criteria:―

Qualitative criteria: e.g., the suitabilityof the shop (location, furnishing, lighting,juxtaposition with other products, etc.), theefficiency of the customer service, and thepresence of qualified staff in the shop. The
qualitative criteria for online sales do notnecessarily have to be the same as those forbrick-and-mortar shops, given the different
characteristics of the two (e.g., the need9for a help desk or better after-sales service
for e-commerce and for secure payment
systems).

―

Quantitative criteria: e.g., a maximum
number of Distributors admitted to the
network, and the requirement to purchaseminimum quantities of products.

The Prada Group has chosen to distribute its
products through a selective distribution system,
based on the quality criteria set out in the
Quality Standards for Authorised Resellers, inorder to safeguard the quality and luxury auraof its products and, more generally, the entire
sales experience for its customers (e.g., offering
products in brick-and-mortar stores or online
with adequate after-sales service) and the brand’s
image and reputation.
As an exception to the prohibition on territorial
and customer type restrictions, the adoption of
the selective distribution system by the PradaGroup lawfully permits:

5.1.3. Other possible vertical or horizontal
agreements
Certain heterogeneous vertical agreements, even if
they do not have obvious anticompetitive aspects, may
nevertheless be critical from an antitrust perspective
and therefore deserve careful assessment on a caseby-case basis.
These are in particular: (i) franchise agreements, (ii)dual distribution agreements, and (iii) commercial
agency agreements. These types of agreements
require precise analysis – for different reasons in eachcase – to avoid the risk of competition law violations.

—i - Franchise agreements

The following obligations on a franchisee areconsidered lawful because they are necessary toprotect the franchisor’s intellectual and industrial
property rights and maintain the common identity andreputation of its network:―

refrain from selling competitors’ products orservices;―a - prohibiting an Authorised Reseller whose
registered office is in the EU economic areafrom selling products outside the European
Economic Area, the UK, and Switzerland;―

refrain from acquiring stakes in the capitalof a competing undertaking such as to giveit the power to influence that undertaking’s
economic behaviour;―b - prohibiting an Authorised Reseller whose
registered office is in a non-EU country/
territory from selling products outside thatcountry/territory;―

refrain from disclosing to third parties theknow-how provided by the franchisor untilthat know-how is in the public domain;―c - requiring Authorised Resellers to sell
products exclusively to customers or other
Authorised Resellers in the network (parallel
sales ban); and―inform the franchisor of any experience
gained by exploiting the franchise;―

inform the franchisor of any infringementsof licensed intangible property rights, takelegal action against infringers, or assist
the franchisor in any legal action brought
against it;―

refrain from using the know-how licensed
by the franchisor for purposes other than
exploiting the franchise; and―refrain from assigning the rights andobligations under the franchise agreement
without the franchisor’s consent.

―d - requiring Authorised Resellers to resell
products at a particular location (location
clause).

All quality criteria and obligations imposed on
Authorised Resellers are specifically describedin the General Terms and Conditions of Sale
adopted by the Prada Group and in the attacheddocument entitled Quality Standards for
Authorised Resellers.
ANTITRUST POLICY

10

The general restrictions imposed by Antitrust
Legislation law also apply to franchise agreements.
Therefore, resale price maintenance, territorial and/or customer allocation and prohibition of internet
sales are considered anticompetitive practices and are
therefore prohibited.

—―iv - information on the position of Prada
products in relation to other brands sold byResellers; and―v - information on consumer feedback andpreferences regarding Prada products andinformation on Prada product marketing(e.g., promotions and other news).

ii - Dual distribution

Dual distribution is a distribution system in whicha Supplier competes with its own Distributors or
Retailers in the downstream retail market. The PradaGroup uses this distribution system as it sells goods
wholesale to Resellers (vertical competition) and sells
products directly to final customers through its own
retail channel at boutiques and online (horizontal
competition).
Given that the Prada Group and its Resellers are, for all
intents and purposes, competitors in the relevant retailmarkets, particular care must be taken in relation to
information exchanges that can result from the existing
business relationship. These exchanges are lawful
only if directly related to performing the distributionagreement and necessary to improve production or
distribution.
Hardcore restrictions apply also to this distribution
system, and Prada Group employees must thus strictly
adhere to the following rules of conduct.
By way of example only, the exchange of the following
information is generally permitted:―

i - technical product information (e.g.,size, colour, material, product care,certificates, and compliance with the current
regulations);―

ii - logistical or volume-related informationfrom Resellers regarding Prada products: (a)purchased by Resellers; (b) sold by Resellers(including with reference to a specificperiod); and (c) returned by customers or instock;―

iii - detailed information about Resellers’customers (i.e., their identity and the items
purchased) only when necessary to verify
that products are not sold to unauthorised
Resellers;

ANTITRUST POLICY

By contrast, the exchange of the following informationis generally prohibited:―i - information on future pricing and pricing
policies, e.g., promotions and discounts
applied by Prada or Authorised Resellers;and―ii - information on the sales of competingbrands’ products by multi-brand Resellers(including, where applicable, the brandwhich the same Reseller owns). This
includes, e.g., purchase volumes and prices
charged by competitors to Resellers that
also sell Prada products.

To facilitate the interpretation of the above rights andobligations under Antitrust Legislation, the European
Commission published guidelines to help identify
permitted and prohibited exchanges of information(‘white list’ and ‘black list’).
If any doubts arise about the exchange of permitted
information, taking certain precautions is advisable(e.g., exchange only historical or aggregated data andimplement internal firewalls to prevent informationfrom Authorised Resellers from circulating to PradaGroup business divisions).

—iii - Agency agreements

Agency agreements, known as ‘genuine agency
agreements’ – generally do not fall within the scopeof Antitrust Legislation. Consequently, the following
clauses included in genuine agency agreements are
considered lawful on condition that no obligations
concerning the assumption of financial or commercial
risks on Suppliers’ behalf are imposed on agents:(a) limitations on the territory and customers towhom agents can resell products, (b) resale pricemaintenance, and (c) bans on online sales.

11The Group’s marketplace, e-concession andconcession agreements also generally constitutegenuine agency agreements on condition that all
financial and commercial risks associated with the saleof Prada products to customers remain with Suppliers.
With specific regard to the above types of agreement,
imposing the following obligations is therefore
prohibited:―a - the obligation on the agent to purchasethe (not only temporary) ownership of the
products sold;―b - the obligation on the agent to invest in
product promotion;―c - the obligation to keep stock at the agent’s
own risk and cost;―d - the obligation to invest in equipment,
premises or personnel training;―e - the obligation to contribute to theexpenses incurred in supplying the products
sold (e.g., transport costs); and―f - the obligation to assume liability fordefective products or breach of contract
with the end consumer.

If one or more of the above obligations are not met,
an agency agreement – in any of its most common
forms (marketplace, e-concession and concession)– cannot be considered genuine and is therefore
subject to the antitrust rules/provisions of Antitrust
Legislation applicable to vertical agreements. As aresult, certain particularly anticompetitive practices,e.g., resale price setting, are considered hardcore
restrictions and thus expose the Supplier to therelated antitrust penalties.

Rules of conduct for verticalagreements
Below are some rules of conduct that Prada
employees and managers must follow indealings with Resellers.

— a - Do provide Resellers with the pricelists applied at the Prada Group boutiques
exclusively as Recommended Prices andnever, even indirectly, as imposed orminimum prices.

— b - Do provide Resellers with the list of

discount percentages applied to end
consumers during private sales at the
Prada Group’s boutiques exclusively assuggested or recommended percentages
and never as minimum or imposed
percentages.

— c - Do not prohibit Authorised Resellers

from carrying out promotional campaigns– in compliance with the Quality Standards
for Authorised Resellers – which advertise
discounts on Prada products.

— d - Do not grant Resellers any incentives(bonuses, rebates, etc.) connected with
their compliance with Prada’s Recommended Prices and/or with refraining fromdiscounting Prada Group products.

— e - Do not exert commercial pressure(threatening to terminate the business
relationship, refusing to supply products,etc.) if a Reseller does not apply the PradaGroup’s Recommended Price.

— f - Do emphasise and reiterate in any

internal or external communications(email, chat, voice or video messages,etc.) that Resellers are free to set prices
and discounts, particularly to Third
Parties or Authorised Resellers thatcomplain of another Reseller offeringa discounted or lower prices than the
Recommend Prices.

ANTITRUST POLICY

12—g - Do not directly or indirectly (i.e., byexerting pressure or making retaliatory
threats) prohibit Resellers from selling
the Prada Group’s products through a
website, without prejudice to compliance/
on condition that the Resellers comply
with the Quality Standards for Authorised
Resellers.

— h - Do not provide marketplace operators

information on Recommended Prices orrequest that they provide that information
to Third Parties that use thosemarketplaces.

5.2. Abuse of dominant position
5.2.1. Possession of a dominant position
An undertaking has a dominant position if it has
sufficient market power to act independently
from competitors, customers and end users andsignificantly and decisively influence the main
parameters of competition (price, conditions of sale,etc.).
To determine whether an undertaking’s market power
constitutes a dominant position, several factors must
be taken into consideration – first and foremost its
market shares:— i - Undertaking with a market share below 30-

40%: The undertaking is unlikely to be founddominant in the absence of additional elements,
e.g., no competitors with significant market
shares.

— ii - Undertaking with a market share of 40–50%:

Additional factors must be taken into account,e.g., entry barriers for new competitors, theundertaking’s economic-financial capacity andlevel of vertical integration, the existence ofeconomies of scale, the possibility to accesssources of supply and major resources, consumer
loyalty to the brand, and customer bargaining
power.

ANTITRUST POLICY— iii - Undertaking with a market share over 50%:
Dominance is presumed and the undertaking
must therefore demonstrate that it is unable toexercise significant market power in the market
in which it operates.

More specifically, to ascertain whether an undertaking
is dominant, the first step is to identify the market
in which it operates within the meaning of Antitrust
Legislation, i.e., the product and geographic market.
The product market includes all goods and services
that are regarded as interchangeable based on theircharacteristics, prices and purpose. The geographic
market is the area in which competition conditions
are homogeneous because of, among other things,
consumer characteristics and habits, transport costs
and applicable regulations.
With regard to the market in which the Prada Group
operates, EU and Italian decision-making practiceidentifies a single relevant market for the production
and distribution of luxury goods, i.e., high quality goods
sold at high prices and characterised by prestige brands
with a low degree of interchangeability with goods inthe same category but which are not luxury goods.
Without prejudice to the fact that the assessment of
dominance must be made on a case-by-case basis andthat an undertaking can be dominant in some markets
and not in others, holding a dominant position is notin itself considered unlawful.
The only thing dominant companies are prohibitedfrom doing is abusing this position to the detrimentof competitors and, above all, to the detriment ofcustomers and consumers. Dominant undertakings
thus essentially have a ‘special responsibility’ which
prohibits them from engaging in certain conduct
which their competitors are permitted to engage in.

5.2.2. Potentially abusive conduct
The EU framework provides a non-exhaustive list
– progressively updated by caselaw and decisionmaking practice – of abusive conduct, which includes:— (direct or indirect) use of unfair contractual
terms, e.g., excessively high prices;13

— limitations in production, market opportunities— the creation of a joint venture.

— discriminatory conduct (i.e., the application ofMergers also include lasting changes in control
resulting from the transfer of: (i) business units; or(ii) operations or assets to which even only potential
turnover is attributable (administrative authorisations,concessions, patents, trademarks, know-how, etc.).

— tying practices (i.e., conduct that makes entering

5.3.2. Notification thresholds

or technical development to the detriment ofconsumers;

dissimilar conditions in commercial relations forequivalent services); andinto a contract conditional on the acceptanceof additional benefits, which – by their natureor according to commercial usage – have noconnection with the contract’s subject matter).

5.3. Merger control
Under EU law, the competent antitrust authorities
must be notified of certain mergers between
companies to enable controls aimed at preventing theconcentration of the market or a substantial part ofit, especially through the creation or strengthening of
dominant positions.
To enable effective and timely control to protect themarkets’ competitive structure, transactions must be
notified before their implementation if:— a - they constitute a ‘concentration between

undertakings’ within the meaning of Antitrust
Legislation, e.g.: (i) mergers between previously
independent entities; (ii) acquisition of the direct orindirect control over another undertaking or partof it; (iii) creation of a joint venture; or (iv) lastingchanges in control resulting from the transfer ofbusiness units, assets or operations to which evenpotential turnover can be attributed; and— b - the undertakings involved exceed specificturnover thresholds.

5.3.1. Definition of ‘merger’Mergers are defined as corporate transactions thatgive rise to a lasting change in the control of thecompanies involved as a result, i.e.:— the merger between previously independent

Not all mergers are subject to scrutiny by the antitrust
authorities, but rather only those which – when theyexceed certain size thresholds – are presumed to havean impact on the competitive balance of the markets
concerned.
Under the EU framework, the European Commission
must be notified of a merger only if all the following
conditions are met:

— the combined worldwide turnover of all theundertakings involved is more than EUR 5
billion; and— the aggregate EU-wide turnover of at least twoof the undertakings involved exceeds EUR 250
million.

However, if the above conditions are met but each of
the undertakings involved achieves more than 2/3 of
its aggregate EU turnover in one member state, thenotification must be submitted to the relevant national
competition authority.
If an undertaking involved in the transaction is partof a group, the turnover to be taken into accountwhen calculating whether the notification thresholds
are exceeded is not only that of the undertaking
concerned but also that of its subsidiaries and/or
parent companies, if appropriate.
Finally, in addition to the EU, more than 100 countries
have adopted merger control laws with varying
turnover thresholds. We therefore recommend
consulting the Antitrust Officer in advance to assess
whether an envisaged merger could give rise to
notification obligations in other countries (be they
within or outside the EU).

entities, or the acquisition of direct or indirectcontrol over another undertaking or part of it; andANTITRUST POLICY14

5.4. Abuse of economic dependence
Although practices that entail abuse of economic
dependence are not specifically regulated by Antitrust
Legislation, in some EU countries – including Italy,
Germany and France – these practices can be subject
to scrutiny and censure by national competition
authorities if the abuse affects the protection ofcompetition and the market.
In Italy, this responsibility falls to the ItalianCompetition Authority (ICA).
Although Italian law does not set out an exhaustive
list of conduct that is considered abusive, it does
identify three possible examples of abuse of economic
dependence:— ‘refusal to sell’ or ‘refusal to buy’ in all cases

in which that conduct is contrary to fairness orgood faith;— ‘imposition of unjustifiably onerous contractual

terms and conditions’ (in light of an overall
assessment of the contractual arrangement
and not an atomistic assessment of the clauseconsidered ‘onerous’) or ‘discriminatory’(compared to the terms and conditions generally
applied by the ‘strong’ contractor to its business
partners); and— ‘arbitrary interruption of business relations’, e.g.,
the unforeseen and unjustified non-renewal ofa contract that occurs at a time that makes it
impossible for the counterparty to recover theinvestments made.

Thus, in assessing whether an abuse of economic
dependence has occurred, it is key to ascertain thatthe dependent, ‘weaker’ party has no access tosatisfactory alternatives in the market and that thedominant, ‘stronger’ party has imposed a series ofunjustifiably onerous contractual conditions which
prevent the weaker party from running its businessindependently.
In recent practice on abuse of economic dependence,
the ICA has focused its attention on franchise
agreements, in relation to which situations ofimbalance between contracting parties can easily
occur.
ANTITRUST POLICY

The following aspects require specific attention: (i)the submission of purchase orders; (ii) the timing oforders and deliveries; (iii) the design and fitting-out
of a sales point; (iv) advertising; and (v) various otherprovisions that can excessively limit a franchisee’s
entrepreneurial autonomy or oblige the franchisee
to make specific, burdensome investments that are
difficult to recover.

— 6. Implementation ofthis Policy
6.1. Antitrust Officer
The Prada Group selects and appoints an Antitrust
Officer with the necessary antitrust expertise gained
during his/her career.
The Antitrust Officer oversees compliance for theprevention of antitrust offences and ensures that:(i) this Policy is implemented, (ii) specialist antitrust
assistance is provided to Prada Group Personnel, (iii)the general requirements of the management system
for the prevention of prohibited conduct are fulfilled,and (iv) the risk of antitrust infringement is constantly
monitored.
Furthermore, the Antitrust Officer:— reports periodically to the Supervisory Bodyof the Group Company he/she works for andliaises with the Supervisory Body to ensure it
performs its duties;— provides the competent Internal Audit

Department indications on the planning of auditsof the various Prada Group Companies and anyother necessary or useful information;— coordinates with the Group’s Legal Department(and Compliance Department, if established)
and with the Legal Offices of the Prada Group
Companies for updates on regulatory andcaselaw developments in antitrust matters;— promotes the adoption and updating, if

appropriate, of internal antitrust procedures;15

— advises Addressees on any doubts or questions

6.3. Prada Group Personnel training— receives periodically from the competent

The Group encourages all Prada Group Personnel tobe familiar with this Policy and Antitrust Legislation.
For this purpose, this Policy is provided to all PradaGroup Personnel and made available on the corporate
intranet.

concerning the application of this Policy andinternal antitrust procedures;

corporate departments, in coordination withthe other Management and Supervisory
Bodies, specific information regarding practicalactivities that could entail antitrust risks (e.g.,sales agreements and communications with
Authorised Resellers, franchise agreements,
and participation in technical discussions andmeetings attended by competitors); and— ensures the adjustment, updating andimprovement of this Policy and plays a role inguiding and coordinating the Legal Offices of the
Prada Group Companies.

6.2. Antitrust risk assessment
The Group Companies carry out – also to assess theadequacy of this Policy and the antitrust procedures
adopted – a periodic antitrust risk assessment (“Risk
Assessment”) aimed at:— identifying the reasonably foreseeable antitrust
risks to which the organisation is exposed;— analysing and assessing the identified risks
based on formalised criteria;— assessing the suitability and effectiveness ofexisting controls and procedures to mitigate
antitrust risks; and, if appropriate;— planning the necessary measures to strengthen
the system for preventing and mitigating risks.

The Risk Assessment is coordinated by the Antitrust
Officer in consultation with the General Counsel, thecompetent local Legal Offices, the Group’s Internal
Audit Department and, if appropriate, the Supervisory
Body. The Antitrust Officer also refers to specialised
external consultants if necessary/appropriate.

Prada and each Group Company, in coordination
with the Antitrust Officer, plan and manage training
on the subject to ensure that each Group Company’s
employees and consultants (as applicable) understandthe following in relation to their positions:— the antitrust risks to which the Addressees andthe Group Company they work for could be
exposed;— this Policy;— the antitrust aspects related to their role within

the Group concerning antitrust risk prevention;and— the preventive measures to be taken and reports
to be submitted relating to the risk or suspicionof unlawful practices.

Each Group Company’s Human Resources Department
monitors that the planned training is attended by the
Prada Group Personnel selected in coordination with
the Antitrust Officer.
Training attendance is compulsory.
The Antitrust Officer is informed about all planned anddelivered training.

6.4. Support and assistance
The Prada Group encourages Prada Group Personnel
to report any doubts immediately. Any member of
Prada Group Personnel who is in doubt as to thecorrect conduct to adopt must first seek assistancefrom the Antitrust Officer by email (antitrust@pradagroup.com) or letter.
Competition authorities may carry out unannounced
inspections at the premises of undertakings, individuals
or legal entities that are believed to be in possession of

ANTITRUST POLICY

16

documents relevant to an investigation. Moreover, theCommission or ICA officials in charge of the inspection
have the power to access all premises where the investigated business is carried on (including cars).

Although anonymous Reports are accepted, named
Reports are preferable as they help make investigations
faster and more effective, in addition to enablingproper dialogue with Whistleblowers.

In the event of inspections and requests for
information, all Prada Group Personnel mustcooperate with competition authority officials andimmediately inform the Antitrust Officer, GeneralCounsel and Internal Audit Department.

The Ethics Committee decides on the necessarycommunications to be made within the organisation
and/or to the Administrative and Supervisory Bodies.

— 7. Reports
Compliance with this Policy is an expression of theprinciple of lawfulness that inspires the Prada Group,as specified in the Code of Ethics.
Therefore, under the terms of the Whistleblowing
Reporting Procedure, any breach or suspected breachof Antitrust Legislation or this Policy must be reported
immediately in one of the following ways:— IT platform: This is accessible to all

Whistleblowers (employees, third parties, etc.)
on each Group Company’s website (e.g., Pradawebsite: https://www.pradagroup.com/it/group/
corporate-governance.html/whistleblowing) and,if applicable, intranet. The platform – provided
by a specialised, independent, third-party
entity – enables users to submit Reports througha guided online procedure without the need toregister or include personal details.

The Ethics Committee also informs the Supervisory
Body and the Antitrust Officer, as the case may be, of
Reports received and the results of the preliminary
checks and any subsequent investigations carriedout, including so as to ascertain whether further
investigation is needed.
Additionally, the Ethics Committee sends the Antitrust
Officer a periodic report prepared for the Supervisory
Body.
The Group Companies guarantee confidentiality
concerning the existence and content of each Reportand concerning the identity of the Whistleblower – ifdisclosed – and of Reported Individuals. Moreover,
Whistleblowers are guaranteed the protections set out
by law.

— Email: Whistleblowers can email the email

The Prada Group supports anyone who submits
a Report in accordance with this section or takes
part in an investigation of a suspected breach andis not involved in the related conduct. Any person
who reports a potential breach or has, in good faithor based on reasonable belief, a doubt regarding
compliance with the Code of Ethics, this Policy and/or
Antitrust Legislation is acting fairly and must not fear or
be subject to retaliation.

— Letter: Whistleblowers can send a letter

Prada Group Personnel will not be penalised, dismissed,
revoked from office, demoted, transferred, harassed,
threatened or discriminated against in any way
for submitting Reports in good faith or based on areasonable belief.

address indicated on each Group Company’s
website and in the Handling of Reports
Procedure (e.g., whistleblowing@pradagroup.
com).

to the address indicated on each Group
Company’s website and in the Handling ofReports Procedure: PRADA S.p.A., Via Antonio
Fogazzaro 28, 20135 Milan (FAO Internal Audit
Department).

For further information on the reporting process,please refer to the specific procedures in place at theGroup Companies.

— other methods provided by the Whistleblowing
Reporting Procedure or by the Prada Group's
institutional website.

ANTITRUST POLICY17

— 8. Breach of thisPolicy8.1. Disciplinary action
Breach of this Policy by Prada Group Personnel
will entail the Group Company concerned taking
disciplinary action. The Group will also ensure its
full cooperation with the competent authorities.
Appropriate and proportionate disciplinary measures
will be applied to every breach, taking into accountalso whether the conduct constitutes a criminal
offence.

8.2. Contractual remedies

The Supervisory Body may also recommend
improvements to this Policy and provide non-binding
recommendations based on emerging best practices.
In the event of breaches, the competent corporate
departments assess whether any revisions/modifications of internal operating procedures could
help prevent breaches from recurring.
The Antitrust Officer prepares a periodic report (atleast annually) on the monitoring carried out, whichmust be sent to the Administrative and Supervisory
Bodies.
The competent corporate bodies appoint the Antitrust
Officer.

A breach by Relevant Third Parties of this Policy’s
principles or provisions could result – based on
specific assessments by the Group Company
concerned – in contractual relations not being
established or being terminated.

— 9. Monitoring andcontinuous improvement
The competent Internal Audit Department examines
and assesses the internal control system – based on
the approved audit programme – to verify that thisPolicy is applied. Additionally, if any breach of thisPolicy or Antitrust Legislation is reported, detectedor reasonably alleged, ad hoc internal investigations
are carried out as necessary/appropriate. These
investigations can be carried out by the competentInternal Audit Department or entrusted, under
specific mandates, to Third Parties with the necessary
skills and that meet the required professional
requirements.
The status and results of the investigations arereported to the Antitrust Officer and the Supervisory
Body, as the case may be.
The Antitrust Officer periodically reviews thisPolicy to ensure it is as effective as possible and, if
necessary, proposes to the Board of Directors that it
be updated.
ANTITRUST POLICY18