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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.
Rolex has until mid-February to appeal a recent decision by the Autorité de la Concurrence (French Competition Authority) to fine it approximately $100 million for its ban on online sales, which the authority has deemed unjustifiable.
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.
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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.
While the authority ruled against Rolex in regard to its ban on online selling, it dismissed a second complaint filed in the case alleging that Rolex engaged in price fixing and would not allow French retailers to discount its watches.
In the full text of its decision, the authority stated that the facts of the case did not, “demonstrate that Rolex France SAS had invited its distributors to restrict their pricing freedom, nor that the distributors would, if necessary, have acquiesced to this invitation.” (Quote from decision translated from French.)
A spokeswoman for the French Competition Authority said Rolex has two months to appeal the decision to the Paris Court of Appeal.
Rolex declined to comment on the decision or whether it plans to appeal.
If its stands, the fine will be levied on Rolex France, Rolex Holding SA, the Hans Wilsdorf Foundation, and Rolex SA.
In addition to the fine, the authority ordered Rolex France to send a summary of the decision to all of its authorized retailers.
The company also must publish the summary on its website within two months and keep it up for seven consecutive days, as well as publish it in the print and digital editions of Le Figaro, a daily newspaper, and the French watch magazine Montres.
The French Competition Authority is an independent body that works to prevent the formation of monopolies and cartels, ensuring consumers have choices and pricing remains competitive, similar to the U.S. Federal Trade Commission’s Bureau of Competition.
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