Rolex France fined 91.6 million euros for prohibiting its distributors from selling its watches online

The Competition Authority announced on Tuesday December 19 that it would impose a fine of 91.6 million euros on the French subsidiary of the Swiss watch manufacturer Rolex, while the latter prohibited its distributors from selling its products online. “for more than ten years”.

Seized by the Union of watchmaking jewelry and the jeweler Pellegrin & Fils, the authority considered “that the stipulations of the selective distribution contract linking Rolex France to its distributors include a vertical agreement restrictive of competition”in a press release reversing its decision.

The competition watchdog in France judges these practices “serious, because they amount to closing a marketing channel, to the detriment of consumers and distributors, while online distribution has experienced increasing growth for fifteen years for luxury products, including watches”.

“Taking into account their duration and their nature, the authority pronounces a sanction of 91,600,000 euros” against Rolex France, and holds Rolex Holding SA, Rolex SA and the Hans Wilsdorf Foundation (other entities of the Swiss group) “jointly and severally liable for payment of the fine”it is noted.

Legitimate concerns

To justify the ban imposed on its distributors from selling its watches online, Rolex cited the desire to preserve its image and fight against counterfeiting. If these two concerns are legitimate in the eyes of the Competition Authority, the total ban on Internet sales is not “proportionate” the objectives pursued, she judged.

“Rolex’s main competitors, themselves faced with this type of risk, have implemented solutions (including certain technologies) making it possible to reconcile online sales and the fight against counterfeiting and off-network sales”she notes.

This financial sanction is announced a week after a sanction of 4 million euros was imposed by the same authority on the tea producer Mariage Frères, for having, among other things, banned the online sale of its products.

While Rolex was also criticized for having concluded “a generalized agreement with its distributors to set the retail price of its watches”the Competition Authority, on the other hand, increased on Tuesday, in the full version of its decision, that this practice was not “not established” and therefore pronounced a dismissal concerning this second grief.

Read also: Competition: Mariage Frères teas sanctioned to the tune of 4 million euros

The World with AFP