Swiss watchmakers cleared of abusing their positions in limiting distribution of spare parts

EU Court

Richemont, Rolex and The Swatch Group have been cleared of breaking any competition laws relating to restrictive practices in the repair and servicing of their watches.

The EU General Court has upheld a decision by the European Commission that found the servicing and repair market to be sufficiently competitive, and that requirements for third party operators to be authorised by the manufacturers is lawful.

The case was being fought by the Confédération Européenne des Associations d’horlogers-Réparateurs (CEAHR), which represents independent watch repairers.

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CEAHR contested watch makers refusing to supply spare parts to independent repairers constituted an “abuse of a dominant position”.

In a 27 page ruling, the EU General Court said there was not enough evidence to overturn the decision of the European Commission. “It could not be concluded that those manufacturers had reserved the secondary markets to themselves by preventing the entry of independent repairers to those markets. Moreover, it stated that such systems did not eliminate effective competition, since competition continued to exist among authorised repairers, particularly since they were able to repair watches of different brands.”

“The refusal to continue supplying spare parts was not sufficient to establish the existence of abuse. That refusal could also be explained by the preservation of brand image and the quality of products and the prevention of counterfeiting,” the ruling continued.

Cousins UK, which is fighting its own battle with Swatch Group to maintain supply of spare parts for independent repairers, says that the EU General Court Ruling does not impact its case because it aims to have its arguments heard in a UK court, not by the European Commission or EU General Court.

“This ruling has not changed anything for Cousins in its legal dispute with Swatch, and the English courts remain free to find that that the conduct of the Swiss watch manufacturers is anti-competitive,” a spokesperson for Cousins says.

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