Can the law fix the problems of fashion? An empirical study on social norms and imbalance of power in the fashion industry

The fashion industry is affected by an imbalance of power that goes beyond the outsourcing of part of the manufacture to developing countries. Said imbalance characterises the whole supply chain and hinders freedom of expression, freedom to conduct business and, hence, creativity and innovation. In order to understand fashion, IP lawyers and lawmakers need to take into account that the law is not the main device the regulating the relevant relationships. Indeed, fashion is a closed community, a family where complaining is rather frowned upon and where contracts do not reflect the actual relationships between the parties. In order to rebalance power, this article explores the possibility to treat good faith and inequality of bargaining power as unifying principles of contract law. However, in light of the evidence collected during a number of in-depth interviews with fashion stakeholders, it seems clear that social norms are the main source of regulation of relationships and, therefore, intervening at the level of the contracts may not be helpful. Competition law, in turn, may be of more help in rebalancing power; however, cases such as Coty v Parfümerie Akzente do not augur well. Moreover, competition law is useful when the relationship is over, but it is in all the stakeholders’ interest to keep the relationship alive while fixing its imbalance. This study confirms recent findings that social norms do not only have a positive impact on fields with low IP-equilibrium and it sheds light on the broader consequences of the reliance on social norms and on its relationship to power imbalance. This work makes a twofold recommendation. First, IP lawyers should engage more with the unfamiliar field of social norms. Second, advocates of a reform of IP aimed at transforming the industry in an IP-intensive one should be mindful that the effort may prove useless, in light of the role of social norms, especially if power is not distributed.