Swiss luxury watchmaker Rolex has encountered a substantial fine of €91.6 million EUR for imposing a decade-long ban on the online sale of its products by authorized distributors, as per France’s Haute Autorité de la Concurrence.
The national competition regulator deemed the prohibition on Rolex’s digital sales as “serious” and detrimental to both consumers and distributors. It highlighted that the luxury watch brand’s restrictive policy effectively shut down a significant commercial avenue, especially considering the upward surge of online distribution in the luxury goods sector, including watches, over the past 15 years.
Rolex had previously defended the ban, citing concerns about protecting its products from counterfeiting. However, the board disapproved of this argument, asserting that the ban was disproportionate. Furthermore, the regulator highlighted the efforts of various competitors who had implemented effective technological solutions to engage in online sales while effectively tackling counterfeit activities.
The regulatory body underlined Rolex’s introduction of a program facilitating the online purchase of pre-owned watches, which guaranteed authenticity through a designated retailer. This program’s existence led the authority to conclude that a total ban on online sales of its products lacked justification. However, Rolex was not subjected to penalties for alleged price restrictions, as the evidence did not sufficiently prove the curbing of pricing freedom for authorized retailers by Rolex France.
As of now, Rolex has refrained from commenting on the fine imposed by Haute Autorité de la Concurrence. The regulatory body expects Rolex France, Rolex Holding SA, Rolex SA, and the Hans Wilsdorf Foundation to address and settle the imposed financial penalty. This significant penalty serves as a stark reminder of the evolving landscape of luxury goods distribution and the importance of fostering a balanced approach between brand protection and consumer access in the digital realm.
