Some of the market’s most esteemed watch brands have been in and out of court over the past 13 years after being accused of abusing their power. According to a complaint filed in 2004 by the Confédération Européenne des Associations d’horlogers-Réparateurs (“CEAHR”), Richemont, LVMH Moët Hennessy-Louis Vuitton, Rolex, Swatch, Audemars Piguet and Patek Philippe (“the Swiss watchmakers”) have been running afoul of the law by uniformly refusing to provide spare parts to independent repair companies is perfectly legal.
The EU General Court’s decision, which was handed down on Monday, comes almost 15 years after CEAHR – a non-profit association that represents the interests of independent watch repairers – first filed a complaint with the European Commission against the Swiss watchmakers alleging the existence of “an agreement or a concerted practice between them and an abuse of a dominant position resulting from the refusal of those manufacturers to continue to supply spare parts to independent watch repairers.”
In July 2008, the European Commission – an institution of the European Union – rejected CEAHR’s complaint, holding that there was insufficient EU interest in launching a formal investigation into the allegedly illegal activity by the Swiss watchmakers, many of which automatically (and rather notoriously) classify otherwise authentic watches that contain any unauthorized parts as counterfeits.
This decision was overturned in December 2010 by the EU General Court, which stated that in rejecting CEAHR’s complaint, the European Commission failed to take into consideration all of the relevant matters of law and of fact. As a result, the European Commission opened the case against the Swiss watchmakers, but ultimately decided not to pursue an investigation due to “the disproportionate nature of the resources that a more detailed investigation would require in view of the low probability of identifying infringements.”
Following an appeal by CEAHR, a three-judge panel for the EU General Court issued its decision in the case this week, agreeing with the Commission and stating that the Swiss watchmakers’ “refusal to continue supplying spare parts is not sufficient to establish the existence of abuse.”
The court further stated, “That refusal could also be explained by the preservation of brand image and the quality of products and the prevention of counterfeiting.”
In short: The watch giants are off the hook when it comes to claims of abuse of power and still maintain a monopoly of sorts on repairs. So, if you want to ensure that you watch remains authentic, you have to have it repaired by them.