On December 19, the French antitrust regulator Competition Administration (The Autorité de la Concurrence) charged Swiss luxury watch manufacturer Rolex 91.6 million euros (about 7 yuan).$200 million) for more than a decade banning its retailers from selling Rolex watches online.
Rolex declined to comment on the blockbuster penalty decision.
Over the years, Rolex has been active in the French luxury watch market, marketing its watches through a network of exclusive authorized independent retailers.
According to the report, the French Competition Authority made the penalty decision after receiving complaints from jewellery dealers Bijouterie Horlogerie and Pellegrin & Fils and conducting raids on Rolex.
It is reported that when Rolex distributes watches to watch and jewellery licensors, it grants retailers the right to distribute their products under a "Rolex Selective Distribution Agreement". Rolex requires that authorized dealers sell only in-store transactions and cannot be sold by mail order or on e-commerce platforms.
The French Competition Authority also disclosed a letter from Rolex to retailers to corroborate this by "We confirm that under no circumstances can our authorized retailers sell our products via the Internet or by mail order." Any sale over the Internet is a violation of Section iv. of the Selective Distribution Agreement signed by all of our authorized retailers3.Provisions of Article B. ”
According to the French Competition Authority, the above-mentioned clauses already constitute a vertical monopoly agreement that restricts competition. Rolex, for its part, argued that the ban on sales was to protect the brand image and combat counterfeit products and parallels.
The French Competition Authority does not question the legitimacy of Rolex's target, but argues that the ban on ** sales is not a measure commensurate with it. This is because Rolex's main competitors themselves face such risks, and they "have implemented (mainly technical) solutions" to reconcile sales with the fight against counterfeiting. In addition, Rolex has developed, in collaboration with one of its retailers, a program for the purchase of second-hand watches with a guarantee of authenticity.
Therefore, the French Competition Authority considers that an absolute ban on the sale of its products is unreasonable. In the opinion of the French Competition Authority, Rolex's approach "amounts to the closure of the commercialization channel, which seriously harms the interests of consumers and retailers, while sales of luxury goods**, including watches, have been booming for the past 15 years".
However, Rolex has not been confirmed by the regulator to impose ** restrictions on watches, as the French Competition Authority found that "the evidence in the case does not prove that Rolex France has restricted the pricing freedom of its authorized retailers." ”
In addition to the fine, the French Competition Authority required the French subsidiary of Rolex to notify the retailer concerned of the decision and to publish a summary of the penalty decision on ** for seven consecutive days within two months.
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Editor: Xiaoya.