Rolex Fined €91.6M for Anti-Competitive Practises in France

Pastorbottle · Dec 22, 2023

That’s assuming that 1 in 5 of xy brand is faulty, and as such why would you sell them? There’d by plenty of other $1k watches a that would have a better hit a miss ratio than that. The other thing to consider is how much profit margin you have with each brand, it is easier to sell a $1k watch as more people can afford that price point you could probably sell more like 50 $1k Seikos to every $20k Rolex.
It would all depend upon your client base.

Archer · Dec 22, 2023

pdxleaf
Why is it anti-competitive for one company to not want to sell its product, whether on-line or in stores?

Here's the thing - Rolex sells their own product on-line - their certified used watches.

At the same time, they prohibit their AD's from selling on-line.

The video above gives a pretty good analysis of it IMO.

pdxleaf · Dec 22, 2023

Archer
Here's the thing - Rolex sells their own product on-line - their certified used watches.

At the same time, they prohibit their AD's from selling on-line.

The video above gives a pretty good analysis of it IMO.

Thanks, Al. After watching (the whole) video, the charge is a bit clearer. I was thinking of this ruling in terms of new watches only.

My take-away, which may not be wholly accurate:

1. The ADs are treated as independent retailers, and thus distinct from Rolex. This then establishes the free market that Rolex is attempting to control.

But why the ruling now? What may have prompted this ruling was Bucherer changing from an AD into a manufacturer owned store. This setup the potential for different treatment.

2. This seemed to become an issue when Rolex started the CPO. They set up different standards for their own company store versus the non-company owned retailers.

3. Does the ruling only apply to used Rolex or does it apply to new watches? If new, why now, and why just Rolex?

4. Are Rolex ADs currently not allowed to offer discounts on new Rolex models? Or are they allowed to do so but choose not to (because they don't need to offer discounts)?

Note: This ruling has zero impact on my watch collection or interest in Rolex (i.e. doesn't make me think better or worse of the watches.) It's just a curiosity and a interesting parlor conversation, should any forum member take umbrage at further discussing Rolex.

Archer · Dec 22, 2023

pdxleaf
1. The ADs are treated as independent retailers, and thus distinct from Rolex. This then establishes the free market that Rolex is attempting to control.

But why the ruling now? What may have prompted this ruling was Bucherer changing from an AD into a manufacturer owned store. This setup the potential for different treatment.

I believe I've read this is a complaint driven process, and the AD's who were limited launched the complaint.

pdxleaf
3. Does the ruling only apply to used Rolex or does it apply to new watches? If new, why now, and why just Rolex?

This was always about new watches from AD's. The CPO program just illustrated that Rolex was doing the very thing they were restricting AD's from doing.

Other brands already sell on-line, which is why Rolex's arguments about needing to limit on-line sales to prevent selling of counterfeits was not working in this case. If others can sell on-line and not have this issue, Rolex can too.

Fallout Boy · Dec 22, 2023

Archer
If others can sell on-line and not have this issue, Rolex can too.

Strange Argument. Who exactly is Rolex harming if it doesn't do this like the others? Or versa: others can apply the same rules...

Foo2rama · Dec 22, 2023

pdxleaf
I'm pretty dense.

Why is it anti-competitive for one company to not want to sell its product, whether on-line or in stores?

To be anti competitive or to attempt to form a trust, don't you need to collude with more than yourself, as in two or more competitors attempt to control the price of a market?

If one company, Rolex, attempts to control the price of their product, isn't that normal? They control how much they want to charge. Why is a company required to sell online?

Please explain this to me.

Basically because Rolex started selling Online in Europe with Bucherer (Rolex owned) and the Euro retailers are pissed that the previous restrictions of not selling online for anyone is allowed in house only.

Fallout Boy · Dec 22, 2023

Again: noone is forced, to continue any contract (with ROLEX).
My AUDI-dealer (forced to take certain amounts and compilations of cars/models or tools and software) stopped and is now a "free" (sic!) dealer.

Archer · Dec 22, 2023

Fallout Boy
Strange Argument. Who exactly is Rolex harming if it doesn't do this like the others? Or versa: others can apply the same rules...

The AD's...who want to sell on-line.

Fallout Boy
Again: noone is forced, to continue any contract (with ROLEX).

True, but just because you have a contract, doesn't mean it's automatically legal, and cannot be challenged.

josiahg52 · Dec 22, 2023

Fallout Boy
Again: noone is forced, to continue any contract (with ROLEX).
My AUDI-dealer (forced to take certain amounts and compilations of cars/models or tools and software) stopped and is now a "free" (sic!) dealer.

Isn't that why it's seen as anticompetitive, though? The take it or leave it attitude? Rolex could just sell their own product as they see fit but don't. They enter agreements with ADs to sell product on their behalf and define the way that product can be offered and sold. They claim online sales risk counterfeit sales. Perfectly okay. Then Rolex begins to sell online and the ADs complain. The court didn't find Rolex's reason for the differing policies to be compelling.

STANDY · Dec 22, 2023

And anyone selling Grey at way above MRSP is selling online 😉

Who probably bought their stock from 😗

STANDY · Dec 22, 2023

Which leaves the question…..

How does anyone that doesn’t sell in store because there displays are empty….

Sell online 🤔

Pastorbottle · Dec 22, 2023

This will also serve as a legal precedent…….a warning shot over the bow, if you will, to other watch companies and other industries.
As we speak all manner of slimey corporate lawyers will be busy hunting loopholes to get around this!

Foo2rama · Dec 22, 2023

STANDY
And anyone selling Grey at way above MRSP is selling online 😉

Who probably bought their stock from 😗

Grey markets dead. You mean flippers?

the AD’s have to sell at msrp.

Omega had the same issue with inline sales in the US a few years back….

pdxleaf · Dec 22, 2023

Foo2rama
Grey markets dead. You mean flippers?

the AD’s have to sell at msrp.

Omega had the same issue with inline sales in the US a few years back….

This is another layer I don't have a handle on.

With Omega, I believe ADs can sell at a discount. I say this because they often do (or did) offer a discount on new sales. This was definitely in store.

But I don't have enough experience to know if an AD could offer a discount online. If they did, they would have had to have the item on their own website, not on the Omega site. Are you saying Omega no longer allows ADs to sell at a discount? Or are you saying Omega ADs cannot offer discounts only online?

I assume Omega ADs are still allowed to decide for themselves individually if they want to sell at a discount.

If Omega boutiques offered a discount but didn't allow their ADs to offer a discount, that would be anti-competitive. It doesn't seem anti competitive to allow an AD to sell at a discount, if they do.

As for Rolex, it does make sense that a manufacturer would have an advantage if it sold online but didn't allow other authorized retailers to sell online. But for France to argue that this anti-competitive, that's harder to accept. There's an argument for saying this could cost a consumer more because it doesn't allow other retailers to offer the same item at a discount, but that seems like it's the manufacturers right.

Again, not necessarily addressing this rambling at you, Foo2rama, just throwing it out there.

josiahg52 · Dec 22, 2023

I bought my Seamaster at a little over 20% discount at an AD last year. There was no negotiation to get there. It just was the price and I didn't see a need to attempt a lower price. OBs and some ADs don't seem to offer any discounts past maybe sales tax but there is probably a much better opportunity to get freebies at OBs. Omega's website allows you to order a watch but I.think you actually complete the sale at an OB. It seems that ADs operate this way, too. I see grey market sellers where you can have new watches sent to you but they're clearly not associated with Omega. Direct online sales don't seem to be a part of Omega's model.

Pastorbottle · Dec 22, 2023

I find that the behaviour of large corporate entities leaves a nasty taste in my mouth.All this market manipulation and corporate bullying of dealers, retailers and consumers further down the food chain, is why I don’t have all that much desire to buy anything new.
It could be watches, cars or any other durable consumer goods, l avoid it to a degree by buying second hand or vintage. Unfortunately I still have to put up with arsehole speculators trying to manipulate the markets, artificially pumping up the price (the sooner these greedy pricks loose their shirts the better!)
Unfortunately with some goods such as perishable items like food or other fmcg items, this obviously isn’t going to work, this still leaves me open still to exploitation from the corporate sector. But at least I can lessen my exposure with durable goods.
Then there is of course the area of technology goods and services which are not really durable goods, as they have such a short useful life due to obsolescence, even though they may actually still be as good as the day they were made, you can’t realistically use them after a short period of time, due to lack of support etc.
You my still have a old computer or mobile phone that would work if only the systems it relied on still existed so on one hand the product itself lasted, but it’s usefulness didn’t.
Alas we are all exploitable in this area.
In fact we are exploitable everywhere but at least if we recognise this fact we can in some small way minimise our exposure in the realm of durable goods, everything else is open slather!

Foo2rama · Dec 22, 2023

pdxleaf
This is another layer I don't have a handle on.

With Omega, I believe ADs can sell at a discount. I say this because they often do (or did) offer a discount on new sales. This was definitely in store.

But I don't have enough experience to know if an AD could offer a discount online. If they did, they would have had to have the item on their own website, not on the Omega site. Are you saying Omega no longer allows ADs to sell at a discount? Or are you saying Omega ADs cannot offer discounts only online?

I assume Omega ADs are still allowed to decide for themselves individually if they want to sell at a discount.

If Omega boutiques offered a discount but didn't allow their ADs to offer a discount, that would be anti-competitive. It doesn't seem anti competitive to allow an AD to sell at a discount, if they do.

As for Rolex, it does make sense that a manufacturer would have an advantage if it sold online but didn't allow other authorized retailers to sell online. But for France to argue that this anti-competitive, that's harder to accept. There's an argument for saying this could cost a consumer more because it doesn't allow other retailers to offer the same item at a discount, but that seems like it's the manufacturers right.

Again, not necessarily addressing this rambling at you, Foo2rama, just throwing it out there.

I am pretty sure that AD's are not allowed to market Omega watches at discount online. In store they can but no advertising of discounts, or offering discounts online. They can instore though or over the phone offer dioscounts.

Walrus · Dec 22, 2023

pdxleaf
I'm pretty dense.

Why is it anti-competitive for one company to not want to sell its product, whether on-line or in stores?

To be anti competitive or to attempt to form a trust, don't you need to collude with more than yourself, as in two or more competitors attempt to control the price of a market?

If one company, Rolex, attempts to control the price of their product, isn't that normal? They control how much they want to charge. Why is a company required to sell online?

Please explain this to me.

I knew an Italian guy who got charged with conspiracy but they never said who with.

Evitzee · Dec 22, 2023

I always find it odd that buyers love the idea of a discount over MSRP, but react with horror when the actual market price is over the MSRP. The MSRP is an artificial (Suggested) price set by the manufacturer, it usually is higher than what the market says the price should be based on supply and demand, hence the often discount. Sometimes, particularly with makers such as Rolex, AP, PP and a few others the market says the price is above the MSRP, so that is what the product is marketed at. No one believes the true market value of a Rolex Daytona is the $15,100 Rolex says it is, it's well above that. A manufacturer does not set the market value of their product, the market sets the value. That's just the way the world works. When governments, or dealers, or other middle men try to force the issue the loser is always the end customer. This ruling won't increase the supply of Rolex watches either online or in stores, nor will it change the ultimate price. All it does is muck up the free market and allows the government to transfer a lot of money from the private sector to government coffers to help fund their operation.

Archer · Dec 22, 2023

Evitzee
I always find it odd that buyers love the idea of a discount over MSRP, but react with horror when the actual market price is over the MSRP. The MSRP is an artificial (Suggested) price set by the manufacturer, it usually is higher than what the market says the price should be based on supply and demand, hence the often discount. Sometimes, particularly with makers such as Rolex, AP, PP and a few others the market says the price is above the MSRP, so that is what the product is marketed at. No one believes the true market value of a Rolex Daytona is the $15,100 Rolex says it is, it's well above that. A manufacturer does not set the market value of their product, the market sets the value. That's just the way the world works. When governments, or dealers, or other middle men try to force the issue the loser is always the end customer. This ruling won't increase the supply of Rolex watches either online or in stores, nor will it change the ultimate price. All it does is muck up the free market and allows the government to transfer a lot of money from the private sector to government coffers to help fund their operation.

This has nothing to do with msrp or market value...that’s a red herring. It’s simply about allowing a specific method of making a sale.

Given how much Rolex has spent on real estate alone recently, the money is a drop in the bucket to them. I’m sure they are not happy to be the loser in any legal action, but to say the customers will suffer because of this makes no sense.

Rolex Fined €91.6M for Anti-Competitive Practises in France

Pastorbottle

Archer

pdxleaf

Archer

Fallout Boy

Foo2rama

Fallout Boy

Archer

josiahg52

STANDY

STANDY

Pastorbottle

Foo2rama

pdxleaf

josiahg52

Pastorbottle

Foo2rama

Walrus

Evitzee

Archer

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