Rolex has been fined €91.6 million (approx. £80 million) by the Autorité de la Concurrence – the French competition regulator. The fine comes in respect to Rolex’s online sales model which prevents authorised dealers from selling new Rolexes online, restricting sales exclusively to bricks and mortar boutiques. This is the conclusion of an investigation that began in 2017 after complaints by Union de la Bijouterie Horlogerie and Pellegrin & Fils.
Essentially, Union de la Bijouterie Horlogerie claim that they were removed from being a Rolex authorised dealer following their request to sell Rolexes online. The removal of them as an AD can be interpreted as Rolex making an example of them to coerce other retailers into acquiescing to their demands – a violation of competition rules. Plus, in theory this leads to a situation where reputable online retailers are excluded from being able to sell new Rolexes, which is where competition rules become a problem as Rolex’s distribution scheme is arbitrarily prejudice towards bricks and mortar retailers.
Rolex World Headquarters in Geneva
Of course, Rolex’s counterargument is that the decision is not arbitrary but necessary, in order to combat counterfeit watches. An argument that the Autorité de la Concurrence rejects for several reasons. Firstly, no other watch brand is operating in the same way despite facing the same problems. Secondly, Rolex has launched its Pre-Owned Certification program which allows for sales of authorised pre-owned watches online through authorised dealers – showing that Rolex is capable of selling their watches online via authorised dealers without running into increased counterfeit issues.
A secondary part of the investigation looked at whether Rolex were being too restrictive with their prices by not allowing retailers to set their own prices. This has been dismissed as being a genuine attempt by Rolex to combat concerns regarding the grey market.
At time of writing Rolex has given no official statement regarding the fine or whether it plans to change its retail practices. Rolex is still free to appeal the fine.
