On December 19, 2023, the French Competition Authority (“FCA”) fined Rolex for having prevented its authorized retailers from selling its products online for over ten years (the “Decision”).[1]  The FCA considered that such a prohibition constituted a vertical agreement restricting competition, rejecting Rolex’s argument that it was necessary to prevent counterfeiting and parallel trade.  The FCA imposed a fine of  €91 million, which is the highest fine imposed to date by the FCA in relation to a prohibition of online sales.  The FCA also investigated whether Rolex had engaged in resale price maintenance between 2011 and 2022, but ultimately rejected this prong of the complainants’ claim for lack of evidence.


Rolex is a leading manufacturer of luxury watches, with an estimated market share of 29% in 2021, well ahead of its main competitors with less than 10% of the market.[2]  Rolex’s watches are designed and produced in Switzerland and then shipped to different subsidiaries, including Rolex SAS, the only importer of Rolex in France.  Rolex sells its watches through a network of authorized retailers that have signed the Rolex Selective Distribution Agreement (the “Selective Distribution Agreement”).  The Selective Distribution Agreement allows the sale of Rolex products by authorized retailers in specifically designated premises.[3]  It includes a prohibition of distance selling,[4] i.e., sales outside of the premises or by correspondence, thus including online sales, which Rolex strictly implemented as evidenced by its internal documents and correspondence with authorized retailers.[5]

The case was initiated in 2017 by a former authorized retailer, whose relationship with Rolex was allegedly discontinued after it presented a plan to create an e-commerce website,[6] and a union defending the interests of companies specializing in the sale of jewelry and watches.  This complaint led to a dawn raid at Rolex’s French headquarters in 2019.

An Unjustifiable Vertical Restraint

The FCA found that the terms of the Selective Distribution Agreement, through the prohibition of distance selling, were sufficient to establish a prohibition of online sales.[7]  In addition, the FCA noted that authorized retailers had unanimously complied with the prohibition, as none of those who responded to the FCA investigation sold Rolex products online.[8]

The FCA observed that it is settled case law that an absolute and general prohibition of online sales constitutes a restriction of competition by object under Article 101(1) TFEU.[9]  Rolex made several arguments to justify the legitimacy and proportionality of its prohibition of online sales, including the need to guarantee a satisfactory purchasing environment, to preserve Rolex’s image, and to combat counterfeiting and off-network sales.[10]  However, the FCA considered that the prohibition was disproportionate, as alternative, less restrictive measures existed.  The FCA noted that Rolex’s competitors, who face the same type of concerns, did not implement a total prohibition of online sales.  Instead, they had recourse to various programs to trace and authenticate their products, e.g. through the use of blockchain technology.[11]  Rolex itself has developed, on an experimental basis, a “Rolex Certified Pre-owned” program with one of its distributors allowing consumers to buy second-hand Rolex watches guaranteed to be authentic. 

Rolex claimed that it was uncertain whether the case law on restriction of competition by object, as a result of prohibitions of online sales, also applied to luxury goods and in particular luxury watches.[12]  It argued that (i) competition in luxury markets is not related to price but to the prestige image of products and services, (ii) online sales of luxury watches are not only marginal but also unsuitable for such products, with little potential for development, and (iii) in any event, Rolex France does not have the production capacity to develop online sales.[13]  The FCA rejected this claim by referring to the CJEU Coty judgment, and considered that competition rules on online sale restrictions as a restriction by object also apply to the distribution of luxury goods, including luxury watches.[14]

A Record Fine for a Prohibition of Online Sales

The FCA imposed a record fine[15] of  €91 million on account of the gravity of Rolex’s practices[16] and the duration of the infringement (over 10 years).[17]  The Decision illustrates the FCA’s constant focus on online restraints.  The FCA adopted the Decision only a couple of days after fining the premium tea company Mariage Frères for online sales restrictions.[18] 

The FCA applied the revised Fining Guidelines adopted in 2021.[19]  It rejected Rolex’s argument that the application of the new Fining Guidelines would violate the principle of non-retroactivity of more stringent criminal laws. The FCA considered that (i) the new Fining Guidelines were necessary to reflect recent legislative changes regarding the criteria for fine calculation;[20] (ii) despite these changes, the criteria to set the level of a fine are not more severe; (iii) the Fining Guidelines are not binding (and therefore not a criminal law); (iv) no legal uncertainty was caused by the changes, as the new Fining Guidelines follow overall the same methodology as the previous fining guidelines.[21]  As a result, the revised Fining Guidelines were applicable in proceedings where the FCA’s objections were notified after the entry into force of the new law.  The FCA also noted that in any event, both versions of the Fining Guidelines allowed the FCA to depart from the calculation method where justified.[22]

The FCA ordered Rolex (i) to send a summary of the Decision to its authorized retailers, and (ii) to publish it in the print and online editions of a daily newspaper and a magazine specialized in luxury watches, and on the homepage of Rolex’s website.[23] 


The Decision, which is currently under appeal, adds to the consensus in current caselaw that the outright prohibition of internet sales is illegal, irrespective of the nature of the products being sold.  This uniform view results from the older caselaw on selective distribution which was further clarified and updated to account for online sales,[24] and from the strong (and ongoing) enforcement from national competition authorities and the European Commission.[25]  A selective distribution network can be considered compatible with Article 101(1) TFEU if (i) the resellers of the network are chosen based on objective criteria of qualitative nature that are uniformly applied to them (condition of non-discrimination), (ii) the restriction(s) implemented by the network have a legitimate purpose (condition of legitimacy), and (iii) the restriction(s) are necessary to the designated purpose (condition of proportionality).  Even if a company presents a legitimate purpose for the restriction (such as combating counterfeiting), the absolute prohibition of internet sales would likely not hold and be viewed as a restriction by object, because competition authorities will always look at whether less restrictive alternatives exist.[26]  This trend is now reflected in the new Vertical Block Exemption Regulation.[27]  The Decision also shows that competition authorities may impose significant fines for vertical constraints.

[1]              FCA Decision 23-D-13 of December 19, 2023, on practices implemented in the distribution of luxury watches sector.

[2]              Decision, paras. 38-39.

[3]              Decision, paras. 62-63.

[4]              Ibid. 

[5]              Decision, paras. 268-272.

[6]              Decision, para. 70.

[7]              Decision, paras. 261-272.

[8]              Decision, paras. 273-278.

[9]              Decision, para. 291.

[10]             Decision, paras. 284-287.

[11]             Decision, paras.  301-309.  The FCA discusses several blockchain initiatives put in place by Rolex’s competitors.

[12]             Decision, para. 280-282 and para. 315.

[13]          Decision, para. 282.

[14]             Decision, para. 316.  Coty Germany (Case C-230/16) EU:C:2017:941 (“Coty)”.  The CJEU found that a prohibition to sell on third party online platforms does not necessarily amount to an anticompetitive restriction of competition, contrary to the prohibition to sell on the distributor’s own website such as the one imposed by Rolex.  For more information, see our October-November 2017 EU Competition Quarterly Report.   

[15]             The previous FCA cases discussing the prohibition of online sales have resulted in fines of a lower magnitude.  Mariage Frères was fined €4 million a couple of days before the Decision (See Decision 23-D-12 of December 11, 2023, relating to practices implemented in the premium tea sector).  In 2008, Pierre Fabre was fined €17,000 (See Decision 08-D-25 of October 29, 2008, regarding practices implemented in the distribution of cosmetics and personal hygiene products sector sold upon pharmaceutical advice).  In 2018, the FCA fined Stihl €8 million (See Decision 18-D-23 of October 24, 2018, regarding practices implemented in the retail of outdoor power equipment).  In 2021, Luxxotica was fined €125 million, but only 697,000 of this fine related to its prohibition of online sales (See Decision 21-D-20 of July 22, 2021, regarding practices implemented in the glasses and glasses frames sector).

[16]             Decision, paras. 447-455.  The FCA rejected Rolex’s arguments that (i) internet sales are a marginal distribution channel for luxury watches, (ii) anticompetitive effects would be limited, and (iii) the concerned consumers are not vulnerable. 

[17]             Decision, para. 467.

[18]             See Decision 23-D-12 of December 11, 2023 concerning practices implemented in the luxury teas sector.  More recently, De Neuville was fined €4 million for similar practices (See Decision 24-D-02 of February 06, 2024 concerning practices implemented in the chocolate distribution sector).

[19]             FCA, Communiqué de l’Autorité de la concurrence relative à la méthode de determination des sanctions pécuniaires, July 30, 2021 (“Fining Guidelines”).  The revised Fining Guidelines were intended to reflect the objectives of the ECN+ Directive of the European Commission, which provides for a more effective enforcement of competition law through the harmonization of the method for calculating fines.  For more information, see our July-August 2021 French Competition Law Newsletter.

[20]             The FCA’s Statement of Objections was sent after the entry into force of the revised Article L.464-2 of the French Commercial Code (i.e., on February 15, 2022), which explicitly mentions the duration criteria and no longer includes the criteria regarding the importance of the damage to the economy.

[21]             Decision, paras. 422-431.

[22]          Decision, para. 434.

[23]             Decision, para. 491.

[24]             While selective distribution networks may lead to vertical restraints, the establishment of such distribution networks are not necessarily considered as restrictive of competition in a given market.  In Metro v Commission, the Court laid out the conditions required for a selective distribution network to be considered legal (Case 26/76; EU:C:1977:167).  Subsequently, the Court heard for the first time a case pertaining to total prohibitions of online sales in Pierre Fabre, confirming its illegality, even if the purpose of the restriction was to “[maintain] a prestigious image” (Pierre Fabre, Case C‑439/09, EU:C:2011:649, para. 46).  The case law was clarified in Coty,which admitted some specific online sales restrictions for third party platforms and the possibility to raise the preservation of a luxury image of a product as an objective justification (Case C-230/16, EU:C:2017:941).  The French case law, which followed the Pierre Fabre interpretation, has since adapted to the Coty ruling (See Decision 18-D-23 of October 24, 2018, regarding practices implemented in the retail of outdoor power equipment).

[25]             The Commission has been especially active on the issue of cross-border sales restrictions (e.g., online “geo-blocking”) and online sales restrictions (whether the measure is a total ban or not).  See inter alia, Asus (Case COMP/AT.40465), Denon & Marantz (Case COMP/AT.40469), Philips (Case COMP/AT.40181), and Pioneer (Case COMP/AT.40182), Commission decisions of July 24, 2018; Guess (Case COMP/AT.40428), Commission decision of December 17, 2018.  More recently, the European Commission sent a Statement of Objections to French fashion house Pierre Cardin regarding this type of vertical restraints (See Commission Press Release IP/23/4031, “Antitrust: Commission sends Statement of Objections to Pierre Cardin and its licensee Ahlers over distribution and licensing practices for clothing”, July 31, 2023).  For more information on the Pierre Cardin investigation, see our February 2022 European Competition Law Newsletter.

[26]          See e.g., Pierre Fabre, Case C‑439/09, EU:C:2011:649, Opinion of advocate general Mazak delivered on March 3, 2011, paras. 31-41.

[27]             Commission Regulation (EU) 2022/720 of May 10, 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices, OJ L 134/4, Article 4(e).