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FRENCH COMPETITION AUTHORITY FINES ROLEX €91,600,000 FOR PROHIBITING INTERNET SALES



The French Competition Authority (''FCA'') declared in its announcement dated 19.12.2023 that it has imposed a fine of €91,600,000 on luxury watch manufacturer Rolex Group (''Rolex'') for prohibiting authorized retailers from selling Rolex watches online.


As is known, FCA opened an investigation in 2019 after it was found that Rolex prohibited authorized retailers from selling Rolex products via the internet or mail order.


In its defense within the scope of the investigation, Rolex stated that internet sales were prohibited to protect the luxury image of its products and to prevent counterfeiting and sales from outside the distribution system.


FCA also stated that Rolex's objectives were legitimate, but that the prohibition of internet sales was not a proportionate measure and that other undertakings operating in the relevant market could take advantage of technological possibilities to implement different solutions to such problems that were less restrictive of competition. The FRO also pointed out that Rolex, together with one of its re-sellers, had developed a program for the online purchase of second-hand watches whose authenticity it guaranteed, and considered that the ban on the online sale of the products was not proportionate.


FCA also emphasized that the sale of luxury goods via the internet has increased over the last fifteen years and concluded that the practices prohibiting the sale of Rolex products via the internet were to the detriment of consumers and retail sellers.


In determining the fine to be imposed for the aforementioned practices, considering the capital, organizational and legal links between the undertakings Rolex France, Rolex Holding SA, Rolex SA and the Hans Wilsdorf Foundation, the amount of the fine was determined based on the turnover of this economic unity. As a result, taking into account the nature of the infringement and the fact that it lasted for more than ten years, a total fine of €91,600,000 was imposed.

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