France’s Competition Authority (Autorité de la concurrence) has just fined Rolex £80 million (€91.6 million) for preventing its authorised dealers from selling new watches online..
Luxury swiss watchmakers Rolex has long held a policy of selling its watches only through official jewellers’ stores it does not allow authorized dealers to sell directly to consumers online but does allow the use of online activity for marketing purposes.
Following a complaint from Union de la Bijouterie Horlogerie and Pellegrin & Fils in 2017, France’s Competition Authority began an investigation which led to a raid of Rolex’s French offices in 2019.
Rolex claims that the ban on online selling is intended to preserve its image and enable it to combat counterfeiting and off-network sales the Autorité de la concurrence did not dispute the legitimacy of these objectives, but it found that prohibiting online selling was not a proportionate measure. Pointing out that Rolex’s main competitors, who themselves face this type of risk, have implemented (primarily technological) solutions to reconcile online selling with the fight against counterfeiting and off-network sales
The national competition regulator stated that the luxury watch brand’s digital sales prohibition was “serious,” as it “amounted to closing a commercialization channel, to the detriment of consumers and distributors, while online distribution has been growing momentum for the past 15 years for luxury goods, including watches.”
The finalization of the investigation and subsequent fine appear to come in response to the rollout of Rolex’s much-touted Certified Pre-Owned program, which allows authorized dealers to sell pre-loved Rolex watches online effectively undermining Rolex’s claim that they need to sell their watches in physical stores in order to assure authenticity.
Rolex can appeal the decision so only time will tell ..
