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Swiss competition authority clears ETA to freely supply movements again this year

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Swatch Group’s ETA has been cleared to supply movements to any other watch brand in a reversal of its position by Swiss competition watchdog WEKO.

In a complete victory for the company, the only limit on its freedom is that WEKO says it will not be allowed to abuse its dominant market position by undercutting rivals’ prices, the default position for every supplier in all industries.

WEKO’s latest ruling brings a seven year saga for ETA, which had agreed in 2013 to reduce the volume of movements it supplied to watch brands outside Swatch Group in a move designed to stimulate production of movements by other companies, increase competition and drive innovation.

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That agreement was due to expire this year, leaving ETA free to ramp up sales, but an interim order at the end of last year cast doubt on whether that freedom would be restored in 2020.

This week’s settlement, which has helped Swatch Group shares to rise by 12% over the past week, is a recognition that competition from the likes of Sellita and Ronda has increased over the past seven years while many more brands have diversified away from single suppliers like ETA or started to make their own movements.

Concerns remain that, with a slump in demand this year caused by the Covid-19 pandemic, ETA could flood the market with product and undermine competitors. WEKO addressed that issue with a statement saying the industry had years to prepare for this and Swatch would not be allowed to abuse its position.

2 COMMENTS

  1. A very silly desision was made by Swatch some time ago by the father Hayat to stop producing movements
    by Swatch for other campanies and now they feel fit to start in a very meassy time to produce movements
    again.
    A very silly desision at this time concidering that they all have started there personel production of movements and tere is no need for Swatch to supply ETA movements.
    Regards Paul Juentgen

  2. swatch need to realise, they need the support of the whole trade, including opening up the supply of spare parts. No point in supplying movements, if parts are restricted.
    Personally, I have no time for them or indeed any company that operates a monopoly in the supply of parts which gives the watch owner zero choice in anything other than an expensive (ie. no competition) repair / service.
    I hope all the manufacturers that switched to Ronda and or Sellita stay with them, why risk swatch throwing another spanner in the works in the future.
    Also, I think it should be made a legal requirement, that at the point of retail sale, the buyer is made aware of the monopoly that particular brand enforces, giving the owner of the watch no choice in where or who services or repairs their watch. Maybe also the owner should be paid an advertising fee as the watch still carries the brand name of the producing factory.
    I reckon hell will freeze over sooner though!

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