European Commission investigates luxury watch manufacturers

Tuesday, 13 September 2011

The European Commission (‘Commission’) has started formal antitrust proceedings against luxury watch manufacturers for an infringement of competition law. The Commission investigates an alleged refusal by luxury watch manufacturers to supply spare parts to independent repairers. 

In 2004 the European Confederation of Watch & Clock Repairers’ Association (‘CEAHR’) lodged a compliant with the Commission against luxury watch manufacturers like Swatch, LVMH, Rolex, Patek Philippe, Richemont and Audemars Piguet. According to the CEAHR from 2002 onwards luxury watch manufacturers started to refuse to supply spare parts to repairers that did not belong to their selective systems for repair and maintenance. Traditionally luxury watches had been repaired by independent multi-brand repairers. The CEAHR is of the opinion that since there are no alternative sources for most of these spare parts, this practice threatens to drive independent repairers out of business.

On 10 July 2008 the Commission rejected this complaint of the CEAHR because of lack of community interest. The CEAHR appealed this decision and the General Court annulled in December 2010 the Commission’s decision to reject the complaint. The main reason for the annulment was that the Commission did not sufficiently motivate in the decision why it concluded that there was not enough Community interest. The Commission has stated in a press release it will now further investigate the allegations, in order to take account of the General Court ruling.  

In May this year the Spanish competition authority also opened an investigation into the luxury watch manufacturers. This investigation concerns technical obstacles to the supply of replacement parts.