Rolex ordered to pay a fine of approximately 153 billion yen for banning online sales of its watches

At the end of 2023, the French Competition Commission imposed a hefty fine of 9160 million euros (approximately $153 million) on Rolex for banning its authorized dealers from selling its watches online for 10 years. Will Rolex ever be allowed to sell its watches online again?

France's Competition Commission fines Rolex $153 million

　At the end of 2023, there was some highly controversial news in the luxury watch industry. On December 19, 2023, the French Competition Commission imposed a fine of 91.6 million euros (approximately 153 billion yen) on Rolex for banning its authorized dealers from selling its watches online for 10 years. This was reported by the French newspaper Le Figaro.

　It took years for the luxury industry to adapt to the web as a means of communication and sales, but today it's become a given. In fact, selling luxury goods online has never been a big problem.

　The "luxury experience" once enjoyed in stores is no longer as sacred as it once was, as both younger and older generations now casually purchase watches, jewelry, and bags online while surfing the web late at night.

　Meanwhile, some brands continue to refuse to sell their products online (even through their own online store), including Rolex, a hugely popular brand among watch enthusiasts.

　The French Union of Jewellers and Watchmakers (UBH) and the Provence-based jeweller Pellegrin & Fils filed a complaint against the French Competition Commission, which imposed a hefty fine of 9160 million euros (approximately $153 million) on Rolex, banning its authorized dealers from selling watches online for 10 years.

　The reason for this is that the "selective distribution" clause in the contract between Rolex France and its distributors, which prohibits online sales, constitutes a vertical restraint and is deemed to be in violation of competition law. Vertical restraints are acts in which a manufacturer restricts the selling price, products, and business partners of distributors who handle its products.

　The Competition Commission rejected Rolex France's argument that the ban on online sales was justified by the need to combat counterfeiting and parallel trade.

　The report also points out that Rolex's main competitors "face the same risks but allow their products to be sold online under certain conditions," and that "they can address the risks of counterfeiting and other issues through less restrictive means."

　Another interesting point highlighted by the authorities is that Rolex has worked with one of its dealers to develop a program that allows users to purchase pre-owned Rolex-certified watches online. "Therefore, a complete ban on the online sale of Rolex products is not justified," the Competition Commission believes.

　In conclusion, the authorities consider Rolex's ban on online sales to be a serious problem, as it closes a channel of commerce at the expense of consumers and distributors, even though online sales of luxury goods, including watches, have been a growing trend for over 15 years.

　Of course, lifting the ban on Rolex online sales also means that the most sought-after models are now available to anyone online, rather than only via a "waiting list."

　Of course, Rolex may appeal this decision, so we'll have to keep an eye on developments.