Rolex Fined $100m Preventing Online Sales

[Jack T]

If Rolex doesn’t want it’s watches sold online, and it’s AD’s want to continue to sell Rolex watches, Rolex watches won’t be sold online.

[subtona]

Originally Posted by 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.

Thank you for the clarity

No easy solution.
rolex does whats good for Rolex and leaves scorched earth for retailers they don’t deem worthy,
Result May be a small victory with unintended consequences.

What remains is the average guy cannot walk into an AD and buy a single (special occasion/milestone) sports watch they desire.
Who wants to buy a bunch of undesirable crap to build a relationship?

I don’t want a relationship with a retailer or Rolex for that matter.

Relationships are for family and friends. I want a single watch, keep the relationship. Rolex certainly will never consider me their brother or son or cousin or friend. Wtf.

Rant over :)

[Watch-Geek]

Originally Posted by Bartolo

I have a drawer FULL of chargers and cables from iPhones over the past 16 years.



USB A, USB C, "Thunderbolt". "Lightning" . . . .



IMHO forcing industry unity around a standard that works perfectly well for all devices was a good thing. And not forcing consumers to pay for yet another charger every time they acquire a new phone, which for many people is much sooner than their chargers end their life, was a good thing too.



I go to Europe and see little cars I'd love to buy here in the States.

They forced them to a single standard, and in response the phones get delivered without a charger, but didn't get cheaper.
To someone who changes their phones every two years, it's not a problem, I use my phones until they die. Current one is 5 years old and still going strong.

With cars it's the same story. For someone who buys a new car every 5-7 years it's no biggie, but in my country cars are on a different PLANET price wise.
Average annual income in my country is under 15.000 USD, but for most people if we look at a median average it is about 10-12000

A cute, small European car in my country is between 25-30.000

A midsize car like a Mazda 6 is 39-50.000 depending on trim level.

A BMW and Mercedes is something an average Joe can only dream about.

So when someone FORCES a manufacturer to only offer ECO FRIENDLY AND EFFICIENT highly stressed engine that you need to change after 5-7 years, it becomes a problem and you end up with people driving 15+ year old cars as they are at least reliable and cheap to maintain.

Sent from my SM-A415F using Tapatalk

[Gourdman]

Originally Posted by INC

So that was the main reason behind the acquisition of Bucherer.

There will be no more ADs, only boutiques owned by Rolex, where such idiots want to flaunt their power by referring to the rule of law. If the operating model of resellers cannot be limited, there will be no resellers.

Well done EU! We've made fools of ourselves again... for a few pennies, Rolex can now keep retailers' margins, control their market better, and make a much bigger profit. And if someone doesn't like it, they're just going to say, "sorry, we're not going to do that anymore where they're messing with our operating model."

They have a hundred million reasons now why reseller contracts will be terminated instead of renewed...

Idiots.

These are luxury watches no one really needs. What is the EU really missing out on?


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[Tricolore66]

I’d love to see what happens to the allocation of new watches to French AD’s moving forward.

[ltmgeller]

Intersting

[INC]

Originally Posted by Notepad12

I doubt Rolex will buy every single AD.

They do not need to buy them. It is more than enough to not lengthen their contract, or not to sell them watches.

Originally Posted by Bartolo

IIMHO forcing industry unity around a standard that works perfectly well for all devices was a good thing. And not forcing consumers to pay for yet another charger every time they acquire a new phone, which for many people is much sooner than their chargers end their life, was a good thing too.

And forcing all iPhone users to buy new USB-C cables and trash all their working Lightning cables was the dumbest thing ever. This whole idea was interesting as long as there were no USB power supplies, since then it's just about a cable.

Originally Posted by Gourdman

These are luxury watches no one really needs. What is the EU really missing out on?

Their seriousness.

In this case, Rolex does not cause a competitive disadvantage in the watch market, but only creates its own sales policy. In such a case, it is by default silly to refer to the rules of competition law. In this case the AD's are working like to be in a franchise, so it is more then silly if the EU wants to dictate the rules for the franchise owner. Usually, such an idioting judgement will lead to very bad things for the end customers at the end:

Rolex can simply end this AD model and become the sole seller. They have plenty of money for that. In this case, moreover, they would be able to completely control their market and the price, with which they would otherwise be able to double their profit without any problems. In fact, it would be completely stupid of them not to do this after the insane fine. Less and less physical shops, more profit for Swiss, less for the EU countries - why would it be good for us?

[JRell]

Rolex should be allowed to do anything they want. If the ADs want to sell Rolex, they play by Rolex rules or don’t sell them.

[htc8p]

is this true? and for blocking sales?

[Wrathchild]

True. And for not selling online.
Seems kinda unfair, a nation penalizing a company and dictating how they should sell their product.

[hojlund]

Originally Posted by JRell

Rolex should be allowed to do anything they want. If the ADs want to sell Rolex, they play by Rolex rules or don’t sell them.

rolex can pull out of France if they feel not fair, it's up to them.

[EEpro]

Originally Posted by Bxtek

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!

Does that mean Mr Wonderful will be his economic advisor though?

[Notepad12]

Originally Posted by hojlund

rolex can pull out of France if they feel not fair, it's up to them.

Also depends if the EU feels like it will follow France's ruling

I can't imagine Rolex pulling out the EU market if it came to it.

Sent from my Pixel 7 Pro using Tapatalk

[INC]

Originally Posted by Notepad12

Also depends if the EU feels like it will follow France's ruling

I can't imagine Rolex pulling out the EU market if it came to it.

There is no need for it. They simply terminate the contracts and close the ADs that are not owned by Rolex. So there will be Rolex-owned stores ONLY, and the EU can do us a favor with its nonsense > For the next time: SHUT UP.

[Notepad12]

Originally Posted by INC

There is no need for it. They simply terminate the contracts and close the ADs that are not owned by Rolex. So there will be Rolex-owned stores ONLY, and the EU can do us a favor with its nonsense > For the next time: SHUT UP.

Fair enough, but couldn't France (/EU) force Rolex owned boutiques to sell new watches online? Part of the issue is, is that they sell pre owned online also.

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[Fredrik]

Rolex were fined for contractually preventing Ads selling new Rolexes online. Those complaining are currently not ADs, they lost their status years ago.

I do not think any AD will sell new Rolexes online even if it isn't in the contract because Rolex SA does not want them to, and you might risk losing your AD status which is a cash cow for any AD. No one is forcing Rolex to sell watches online, this was an issue with the contracts and they can only be forced to remove parts of the contract.

Oh, there is currently only one Rolex owned store in the world, in Switzerland which isn't in the EU.

[Bill2e]

$100 MM

If I were Rolex, there would be no more Rolex for sale in France.

[RTG]

Originally Posted by hojlund

rolex can pull out of France if they feel not fair, it's up to them.

More likely Rolex will open their own boutiques in France and rapidly faze out existing AD's from the French market. Current French AD's will regret their insolence. They bit the hand that feeds them, won't work out well for them.

[southtexas]

Originally Posted by Geo1980

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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If none of them is allowed to sell online, then they all remain on equal footing, no?

And what do the distribution agreements allow? I'd be shocked if they aren't clear as gin on the manner(s) in which the product can be sold.

[MonsterSS]

Originally Posted by DJ2020

I feel a price increase coming!

Haha - agreed!!!

[frank gama]

https://youtu.be/3b59gQVii7M?si=XDhoEx8F0I4Tboiq

[Glidelock]

[jamesbondOO7]

Originally Posted by Geo1980

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.

Envoyé de mon SM-F946B en utilisant Tapatalk

Exactly

[askdanny]

Originally Posted by Geo1980

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.

Envoyé de mon SM-F946B en utilisant Tapatalk

I have a problem with how they determined the fine. The fine was meant as a punishing act not as a restitution to the plaintiffs.

Therefore the court uses data on the last ten years of revenue and revenue made globally -- arguing it is Rolex SA that needs to be fined, not just Rolex France. The fine has to hurt; it can't be solely based on 2013 revenue.

We all know the market has gone bananas in the last five years and looks completely different than a decade ago. Why did the AD wait so long to sue? Was it after it realized how much it was missing out? The dealer's authorization was pulled in 2013.

The fine was meant truly to be punishing to Rolex. C'est dommage.

--Danny

[Waddessi]

This is a multifaceted Gigantic issue, and just the beginning of what will come if these fines in findings are fruitful. The consumer is at harm, watch and business owners have been harmed, the watch service trade have been damaged in this extends throughout the entire globe. The unfair trade practices have been ongoing for as long as I can remember, and anyone that has a history of dealing with this company, and the way they operate, will most likely agree that this is a deep, rooted problem that no government has taken action on until now. This fair trade Internet selling is probably the easiest target for France. There’s no other product such as the automotive industry if you were to take a microscope to enable such unfair trade practices, supplier practices, parts practices, that is completely entirely unfair to those industries and ultimately the consumer. In the end, the prices have been driven through the roof, if Consumer can even get their product serviced by a watchmaker, if ROLEX claims that their watches last lifetime can be challenged now because of the inability to even get parts for watches that are even 25 years old. Surely will be interesting to watch this process unfold. if this is a financially successful claim against ROLEX, lookout, ROLEX, Geneva, because the rest of the world will be coming for you. Not only have business has been harmed, but the ultimate consumer as well. This is a sad state of affairs and example of what has deeply damaged the watch industry.

[Waddessi]

This is a multifaceted Gigantic issue, and just the beginning of what will come if these fines in findings are fruitful. The consumer is at harm, watch and business owners have been harmed, the watch service trade have been damaged in this extends throughout the entire globe. The unfair trade practices have been ongoing for as long as I can remember, and anyone that has a history of dealing with this company, and the way they operate, will most likely agree that this is a deep, rooted problem that no government has taken action on until now. This fair trade Internet selling is probably the easiest target for France. There’s no other product such as the automotive industry if you were to take a microscope to enable such unfair trade practices, supplier practices, parts practices, that is completely entirely unfair to those industries and ultimately the consumer. In the end, the prices have been driven through the roof, if Consumer can even get their product serviced by a watchmaker, if ROLEX claims that their watches last lifetime can be challenged now because of the inability to even get parts for watches that are even 25 years old. Surely will be interesting to watch this process unfold. if this is a financially successful claim against ROLEX, lookout, ROLEX, Geneva, because the rest of the world will be coming for you.

[soulsea]

Any updates on this?