Luxury watchmaker Rolex was fined about $100 million by France’s antitrust agency for an illegal decade-long crackdown on distributors selling the Swiss firm’s luxury watches online, reported Bloomberg earlier this week.
France’s competition watchdog – Haute Autorité de la Concurrence – set the fine calling the watchmaker’s actions were “serious”, added the report.
It further maintained that Rolex’s actions amounted to “closing a commercialization channel, to the detriment of consumers and distributors, while online distribution has been gaining momentum for the past 15 years for luxury goods, including watches,” added the report.
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The body struck down the luxury Swiss watchmaker’s argument that banning online sales protected its image and thwarted counterfeiting, calling the measure “disproportionate”.
It also pointed out that competitors facing the same risks had “enacted solutions (particularly technological)” that allowed them to sell online while fighting counterfeiting and off-network sales.
The ruling further stated that since Rolex developed “a program for the online purchase of pre-owned watches, whose authenticity it guarantees” with one of its retailers, “an absolute ban on the online selling of its products cannot therefore be justified”, reported WWD.
The Swiss watchmaker was, however, cleared of restricting prices, as the watchdog found that “the evidence in the case did not prove Rolex France had restricted the pricing freedom of its authorized retailers.”
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The case had been referred to the French body by the Union de la Bijouterie Horlogerie professional organization, Marseille-based retailer Pellegrin & Fils and had resulted in raids on Rolex’s offices in France.
The Haute Autorité de la Concurrence held Rolex France, Rolex Holding SA, Rolex SA and the Hans Wilsdorf Foundation “jointly and severally liable” for payment of the fine.
In addition to the fine, the French competition watchdog imposed that Rolex inform all its authorized retailers of the decisions and publish the summary of its decision on its website in French newspaper Le Figaro online and in print as well as the Montres Magazine quarterly, added WWD.
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