Rolex Fined $100M in France Over Online Sales Ban

roadwarrior

Grand Tyme Master
Founding Member
Joined
Jul 17, 2014
Messages
64,949

December 20, 2023​


It may soon be just a little bit easier to buy a new Rolex in France.

The Swiss watchmaker has been fined $100 million by the country’s antitrust agency for effectively banning its authorized dealers from selling watches online, Bloomberg reports. While the company claims its offline-only sales model is “justified by the need to combat counterfeiting and parallel trade,” France’s Autorite de la Concurrence rejected that argument.

The decision appears to come in response to the rollout of its much-touted Certified Pre-Owned program, which allows authorized dealers to sell Rolex watches online. The program, which at once helps Rolex gain better control of its wares on the secondary market, also assures collectors that they’re getting an authentic product. In July, a Watchfinder & Co. study found that half of the luxury watch market was said to be made up of counterfeit Rolexes. At the time, the company’s CEO Arjen van de Vall told Bloomberg, “Rolex is the most aspirational luxury watch brand and [has] the highest demand, hence, it’s the most replicated.”

https://robbreport.com/style/watch-...for-preventing-french-watch-sales-1235452167/





On Tuesday, the regulator issued a ruling saying that Rolex’s policy violates French law, and amounts “to closing a marketing channel, to the detriment of consumers and retailers, when online distribution of luxury products, including watches, has been booming over the past 15 years.” In addition to the nine-figure fine, the company has been ordered to inform its retailers of the decision and to leave a summary of it published on its website for seven consecutive days within the next two months.

Rolex Fined $100M in France Over Online Sales Ban​

The luxury watch giant has two months to appeal the decision, which was handed down Dec. 19.

https://nationaljeweler.com/articles/12557-rolex-fined-100m-in-france-over-online-sales-ban#:~:text=Paris—A French regulatory body,19.

Paris—A French regulatory body has fined Rolex €91.6 million (approximately $99.9 million) over its decade-long practice of preventing authorized Rolex dealers in France from selling its watches online.

The Autorité de la Concurrence, or French Competition Authority, announced the fine Dec. 19.

It followed a nearly seven-year investigation that began in January 2017 at the behest of French retailer Pellegrin & Fils, which was an authorized Rolex distributor from 1999 until the watch brand dropped it in 2013, and the Union de la Bijouterie Horlogerie, a union for workers in the French watch and jewelry industries.

The investigation included dawn raids on Rolex’s French offices in 2019.

In the end, the authority concluded that Rolex’s practice of prohibiting its retailers from selling its watches via mail order and the internet is “inherently restrictive of competition.”

“The Autorité considers these practices to be serious, as they amount to closing a marketing channel, to the detriment of consumers and retailers, when the online distribution of luxury products, including watches, has been booming over the past 15 years,” it stated in its summary of the decision.

The authority rejected Rolex’s argument that prohibiting online sales helps it combat counterfeiting and prevent out-of-network sales, noting that the watch brand’s competitors face the same risks yet still allow their retailers to sell online.

They have “implemented (primarily technological) solutions” to help with these issues, the authority said.

It also noted Rolex’s development of its Certified Pre-Owned program for authorized dealers as another reason the brand cannot justify banning online sales, as the pre-owned watches are sold online and Rolex guarantees the authenticity of every single one of them.

“An absolute ban on the online selling of its products cannot therefore be justified,” the authority said.

Rolex’s CPO program launched at Bucherer stores in Europe in December 2022. The watches became available in the United States in May, beginning at Tourneau/Bucherer stores.
 
Back
Top Bottom