European Union Antitrust Regulators Investigate Some Luxury Watchmakers

The European Union antitrust regulators are set to investigate an allegation that has come forward accusing several luxury watchmakers of breaching European Union rules by declining to supply spare parts to independent watch repairers.

The European Confederation of Watch and Clock Repairers’ Association filed a similar complaint three years ago that was thrown out by the European Commission. However, a year ago, the Commission’s decision was annulled by the Luxembourg-based General Court, which means the Commission must now investigate the allegations.

While the Commission is not identifying all of the companies involved, Swatch Group, which owns Breguel, Blancpain, Omega and Longines has confirmed it was a target and Beatrice Howald a spokeswoman for the company said, “It concerns almost the entire watch industry,” and added, “We are confident regarding the outcome of this investigation.” Other luxury watchmaking companies are yet to comment.

The complaint indicates that because there are no alternative sources for most spare watch parts, watchmakers’ actions threatened to drive independent repairers out of business.

The issue appears to have come to fruition because luxury watchmakers use a clockwork or mechanical movement that involves small precision parts and requires the work of an expert to repair them. In contrast, the mainstream watch industry, which is not involved in the investigation, relies on self-contained, battery-driven electronics.

The complaint also says that anyone who owns and expensive watch is increasingly forced to send it for repair to the manufacturer or through an official agent who may charge for work that was not requested and sometimes the cost for this service can be very high.

The investigation is looking at the terms of free competition and the European Confederation of Watch and Clock Repairers’ Association website notes, “free competition no longer exists and then brands have no respect for the confidence you have in your usual qualified watchmaker.” Luxury watch repairers are noticing that it is nearly impossible now to get parts from luxury brands unless you have a personal relationship with a brand.

Source: Reuters