Rolex Fined $100m Preventing Online Sales

[hl0m4n]

france getting the ball moving for online sales ?

[DJ2020]

Interesting development.

[Robf52]

Ridiculous to think a company can't go to market in the way fitted to their legal, moral and longstanding corporate marketing practices and strategy. Who is being harmed by Rolex's policy of no online sales? No one. Seems like a case of crazy government overreach. If I were Rolex I would consider exiting France.

[Bxtek]

I think this is definitely a little crazy. Any brand or any product should be able to market or sell their products the way they want to. Why is there a "law" that you need to sell through a certain platform or method?

One of the arguments by Rolex is that not doing online sales helps them control people buying counterfeit products. There is some truth to that but it was argued that lots of reputable sellers are selling Rolex watches online. Rolex responded that those are second hand sellers/grey market and they have no control over that. Next, it was brought up that other high end brands like Omega and Cartier also face the same challenges with counterfeits, and they are able to sell successfully sell online. So, why can't Rolex do the same?

[Notepad12]

Originally Posted by Bxtek

I think this is definitely a little crazy. Any brand or any product should be able to market or sell their products the way they want to. Why is there a "law" that you need to sell through a certain platform or method?

One of the arguments by Rolex is that online sales helps them control people buying counterfeit products. There is some truth to that but it was argued that lots of reputable sellers are selling Rolex watches online. Rolex responded that those are second hand sellers/grey market and they have no control over that. Next, it was brought up that other high end brands like Omega and Cartier also face the same challenges with counterfeits, and they are able to sell successfully sell online. So, why can't Rolex do the same?

You can also buy Tudor's online through various official channels such as Goldsmiths/WoS

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[Ceriano]

Interesting. Can the companies also discriminate against who buys their product? If they don’t like you they don’t sell you the watch? I feel if you got money they should sell you the product. What if they are discriminating against your race income gender …? We should write to our senators, mine wears a date just!

[Bxtek]

Originally Posted by Ceriano

Interesting. Can the companies also discriminate against who buys their product? If they don’t like you they don’t sell you the watch? I feel if you got money they should sell you the product. What if they are discriminating against your race income gender …? We should write to our senators, mine wears a date just!

What you mention IS already happening, and has obviously been happening for the past number of years at Rolex AD's! If they don't like you, they definitely won't sell to you. One of the reasons for people trying to warm up to their AD with donuts, candy and other gifts at random. I'm sure you've heard of people doing that?

[rohada]

https://www.rolexforums.com/showthread.php?t=929921

Mind your p's and q's

[Gcon71]

Rolex is not being told how to market, it is being told what conditions it can put on retailers who market. The complaint was brought by the Union of Jewellers and Watch Sellers and an individual Retailer.

Rolex also was not ordered to allow unfettered online sales, rather it was sanctioned for imposing a total ban on its retailers over the course of a ten year period.

What is being overlooked, crucially, is that the complainants lost the argument that Rolex had also imposed price fixing on them, or rather the allegation had “not been established”.

Whether the retailers wanted to sell for over or under retail is not clear but from my perspective Rolex dodged a real issue with this. Had they lost retailers could have set whatever price for whatever reference, eg. 30k euros for a steel Daytona.

[Ceriano]

Originally Posted by Bxtek

What you mention IS already happening, and has obviously been happening for the past number of years at Rolex AD's! If they don't like you, they definitely won't sell to you. One of the reasons for people trying to warm up to their AD with donuts, candy and other gifts at random. I'm sure you've heard of people doing that?

Of course! You can’t discriminate who you sell your house to how rolex can discriminate who gets their watches? How do I know the reason for not getting the watch is not my look? We need something similar to fair housing act so brands can’t discriminate against buyers. teddy baldassarre needs to run for senate. The man looks sharp in suits. He will be our voice.

[Gaussian]

How do we go from discussing the ability of a government to force and require a company to sell its products online to a discussion on discrimination?

It seems to be a bit of a stretch.

As long as we are going through the weeds I will take the bait and say that while I don’t always appreciate how our watches are being used as a way of driving revenue for other products, such as jewelry, is it discrimination to reserve a product and use it as a way of rewarding the best and highest spending customers? Especially when it isn’t the manufacturer who is making these decisions but rather the retailer.

Back to the initial question, if a government is going to require a company to retail online, is that government going to force all manufacturers to create an online store? By that logic, even companies such as Ford and Mercedes should also be required to sell online. Why stop there, make every service business sell their services online too.

Where will the end be to all of this government overreach?


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[Geo1980]

Funny to read people vocifering against a country forcing a company to sell online, when this is not at all what the decision is about...

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[Ceriano]

Originally Posted by Gaussian

How do we go from discussing the ability of a government to force and require a company to sell its products online to a discussion on discrimination?

It seems to be a bit of a stretch.

As long as we are going through the weeds I will take the bait and say that while I don’t always appreciate how our watches are being used as a way of driving revenue for other products, such as jewelry, is it discrimination to reserve a product and use it as a way of rewarding the best and highest spending customers? Especially when it isn’t the manufacturer who is making these decisions but rather the retailer.

Back to the initial question, if a government is going to require a company to retail online, is that government going to force all manufacturers to create an online store? By that logic, even companies such as Ford and Mercedes should also be required to sell online. Why stop there, make every service business sell their services online too.

Where will the end be to all of this government overreach?


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Is the practice any different at their own boutiques and bucheror? Can’t blame that on independent ADs. It’s the practice that allows for discrimination.

[Robf52]

Originally Posted by Geo1980

Funny to read people vocifering against a country forcing a company to sell online, when this is not at all what the decision is about...

As I understand it, they are not being fined for not selling online, they are being fined for disallowing their independent AD's from selling online. Not sure what your point is. To me that's a distinction without a difference.

[soulsea]

Fascinating, I wonder if this is one of the reasons AP went company owned boutiques only.

If this sticks I'm guessing this will apply to Patek as well.

[Calatrava r]

Originally Posted by Robf52

As I understand it, they are not being fined for not selling online, they are being fined for disallowing their independent AD's from selling online. Not sure what your point is. To me that's a distinction without a difference.

Good for you to pick up on that point.

[Geo1980]

Originally Posted by Robf52

As I understand it, they are not being fined for not selling online, they are being fined for disallowing their independent AD's from selling online. Not sure what your point is. To me that's a distinction without a difference.

There is however a big difference, Rolex has perfectly the right to choose how it would sell its watches (online or not) and there is no law against that. Rolex is however not selling to customers but only enters into distribution agreements with various distributors. Once they do that, they have to comply with anti-trust / competition rules that we have in Europe, US, Canada and most western countries. In a nutshell, if you choose more than one distributor, you have to enable them to compete properly, and nowadays that means allowing them to sell online as well as this is a major medium of commercialisation which is essential to competition.
So again, not a decision forcing Rolex to sell online (simply because Rolex is not selling its watches to customers to start with) but a decision preventing contractual arrangements between a brand and its distributors when these arrangements limit a proper competition.

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[Bxtek]

Originally Posted by Ceriano

Of course! You can’t discriminate who you sell your house to how rolex can discriminate who gets their watches? How do I know the reason for not getting the watch is not my look? We need something similar to fair housing act so brands can’t discriminate against buyers. teddy baldassarre needs to run for senate. The man looks sharp in suits. He will be our voice.

Very true. Technically you cannot discriminate on who you sell your house, car, watch or any item to. However, unfortunately it does happen behind the scenes all of the time. Look at Ferrari and now Porsche.....looking at people's credentials before they will sell them a limited edition vehicle. In all fairness, it should be first come first served to whoever has the funds to make the purchase!

We all know this in the recent Rolex world, discrimination happens every day at AD's. I've experienced it, and I'm sure each and every one of us here who has walked into an AD has experienced it too. We all know that they DO have some highly desirable pieces in the back. However, they are sizing you up beforehand, and are deciding whether they even want to offer one to you. Whether it be proving to them the size of your wallet (by making other jewelry purchases), or how much you "kiss up" to the AD by the number of visits, bringing donuts and/or gifts, or maybe they don't like your attitude, or simply don't like the way you look! It's all discrimination in some form imo. However, it's this discrimination that allows the grey market to be in business.

Buy from a grey dealer and there's really none of that. If they have the watch you want and you got the money, 99% if you're the first one to send it to them, the watch is yours! Buying from Rolex should be just like that, but with the MSRP price.

I second the vote for Teddy Baldassarre!

[Bxtek]

Originally Posted by Robf52

As I understand it, they are not being fined for not selling online, they are being fined for disallowing their independent AD's from selling online. Not sure what your point is. To me that's a distinction without a difference.

Okay, very true. However, when you are a Rolex AD there are rules that Rolex requires for you to be one. I heard certain amount of square footage of your store needs to be dedicated to their brand, the decor needs to be up to a certain standard, updated when required at the store's expense, and also that you cannot sell online. When they signed up to be an AD, I'm sure Rolex informs them of all of the requirements. If the store doesn't like something, they could always pass on being an AD. We all know why they're willing to bend over backwards to be one though!

So, with the above in mind......How about Swatch? Shouldn't they be in the same boat since they are not allowing the stores to sell the MoonSwatch pieces online? Same difference imo. I know that Swatch sells other models online, so is that a pass for them? What if Rolex said, okay.......we are selling the 1908 line of watches online now, but those are the only ones. The others you have to go into the stores in person to purchase. Would be the same thing?

[Bxtek]

Another question is that Rolex has been selling their watches in this same fashion for YEARS! Internet has been around for a long time and nobody has had a problem. What has changed to make this a concerning issue now? This lawsuit should have been filed and put through a LONG time ago if there was some sort of real problem?

[77T]

The ruling is a classic restraint of trade with regard to “place” - that is, any manufacturer disallowing a retailer’s choice of place to market their goods.

Remember the goods are the property of the retailer once the manufacturer has been paid.

Place has been also defined in the US (after the SCOTUS ruling in SD v Wayfair) to include “virtual place”, i.e., online. [decision eliminating the requirement that a seller have physical presence to trigger a tax]

Rolex is already restrained from setting Price (they may “suggest”, though), demanding sole Product offer, or controlling Promotion.

However, Rolex at its sole discretion can choose not to renew an authorized jeweler’s contract. Thus, the plaintiffs were an association of jewelers. Smart!

[Tphamnd02]

They can just list their CPOs and call it a day or new ones but unavailable.

[Dskelcy]

What happened in this case is not being accurately represented on this forum. What happened was that Rolex was selling their watches online through their Rolex owned stores but forbidding their ADs from the watches online themselves. Thus, Rolex was taking advantage of online sales while prohibiting their ADs from this exact same practice. Rolex’s actions created an unfair competition practice and this is what the fine was for.

[Notepad12]

Interesting information:

The French authority rejected a defence from Rolex’s lawyers that restrictions are needed to prevent counterfeiting and parallel trade in its watches.

Rolex was cited for a decade of restrictive practices that prevent its partners from selling online.

The watchmaker successfully defended its practice of enforcing recommended retail prices for its retailers, with the authority accepting that preventing the sale of fake Rolex watches and grey market trading are legitimate commercial aims.

However, its ruling noted that Rolex’s competitors have not used the same tactics despite facing similar risks.

France’s Competition Authority opened its investigation into Rolex back in 2017 following complaings from Union de la Bijouterie Horlogerie and Pellegrin & Fils.

This led to a raid of Rolex’s French offices in 2019.

Pellegrin & Fils, a former Rolex AD, said was it had been cut from the network of partners in 2013 with no justification.

The retailer’s lawyers said the “eviction” came after it tried to convince Rolex to allow it to sell its watches online, and suggested it was signed out to make it an example to other partners to keep them in line.

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[ErichKeane]

Originally Posted by Bxtek

Okay, very true. However, when you are a Rolex AD there are rules that Rolex requires for you to be one. I heard certain amount of square footage of your store needs to be dedicated to their brand, the decor needs to be up to a certain standard, updated when required at the store's expense, and also that you cannot sell online. When they signed up to be an AD, I'm sure Rolex informs them of all of the requirements. If the store doesn't like something, they could always pass on being an AD. We all know why they're willing to bend over backwards to be one though!

So, with the above in mind......How about Swatch? Shouldn't they be in the same boat since they are not allowing the stores to sell the MoonSwatch pieces online? Same difference imo. I know that Swatch sells other models online, so is that a pass for them? What if Rolex said, okay.......we are selling the 1908 line of watches online now, but those are the only ones. The others you have to go into the stores in person to purchase. Would be the same thing?

Swatch isn't getting into trouble because they aren't preventing their ADs from selling them, they are selling the Moonswatches from their own owned shops, which they can decide the rules for. That is, there is no independent business between you and Swatch in those cases (you're buying directly from Swatch).

In this case, Rolex is selling to a 3rd party, and then, according to the courts, unfairly restricting them from selling.

[Notepad12]

Originally Posted by ErichKeane

Swatch isn't getting into trouble because they aren't preventing their ADs from selling them, they are selling the Moonswatches from their own owned shops, which they can decide the rules for. That is, there is no independent business between you and Swatch in those cases (you're buying directly from Swatch).



In this case, Rolex is selling to a 3rd party, and then, according to the courts, unfairly restricting them from selling.

So from my understanding, once the AD owns the watches (since they bought them from Rolex) they should be able to sell as they want too (online included) and that Rolex's argument doesn't stand up since other high end brands are selling online

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[DJ2020]

I feel a price increase coming!

[ErichKeane]

Originally Posted by Notepad12

So from my understanding, once the AD owns the watches (since they bought them from Rolex) they should be able to sell as they want too (online included) and that Rolex's argument doesn't stand up since other high end brands are selling online

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Yes, thats about it. Though they'd likely get into anti-trust laws again if they tried to limit sales to ADs as punishment.

The Rolex anti-fake argument was discounted by the courts by other watch brands, but had that not been the case, I'm guessing it would be easy to discount the argument based on OTHER luxury goods being sold online by retailers.

[Notepad12]

Originally Posted by ErichKeane

Yes, thats about it. Though they'd likely get into anti-trust laws again if they tried to limit sales to ADs as punishment.



The Rolex anti-fake argument was discounted by the courts by other watch brands, but had that not been the case, I'm guessing it would be easy to discount the argument based on OTHER luxury goods being sold online by retailers.

So basically France will keep causing Rolex trouble until they let AD's sell online?

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[Bartolo]

Originally Posted by Notepad12

So from my understanding, once the AD owns the watches (since they bought them from Rolex) they should be able to sell as they want too (online included) and that Rolex's argument doesn't stand up since other high end brands are selling online

The first half is absolutely correct. French law views it as an illegal restraint of trade to dictate "no online sales" to AD's for product Rolex has already sold to the AD.

As for the second half, not only do other retailers do it, but importantly Rolex does it / allows it with the CPO pieces. If counterfeiting risk was a significant risk for new watches it would be for CPO Rolex too . . . that was the reasoning given.