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Office of Competition and Consumer Protection

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Wristwatch market collusion

< previous | next > 16.12.2015

Wristwatch market collusion

The Office of Competition and Consumer Protection (UOKiK) fines Swatch Group Polska and several retailers for entering into an illegal price setting agreement on a range of watch brands.

Proceedings in the case began in June of 2013 and ended with UOKiK imposing fines exceeding 2 million PLN on five companies for establishing minimum retail prices on watches in both brick-and-mortar and online shops. The brands included Omega, Tissot, Certina, Longines, Rado, Swatch, Flik Flak and CK, all of which are distributed in Poland exclusively by Swatch Group Polska. Consumers, in turn, have been unable to purchase watches for less than a prearranged price minus a given rebate (for online stores up to 12%).

The agreement had vertical elements between the Swatch Group and retailers, as well as a hub and spoke arrangement, whereby the competing retailers leveraged Swatch Group Polska’s location on a different rung of the supply chain to exchange information on resale prices and other price policies while avoiding direct contact with one another. Three of the retailers — Krakowski Salon Jubilerski, FHU Płonka oraz Max-Time — also directly exchanged information about prices.

The illegal agreements existed between the brick-and-mortar stores since 2005, and between the online ones since 2009, with Swatch Group Polska monitoring the use of prices by retailers and imposing sanctions — in some cases even suspending deliveries — when a company sold merchandise at prices less than those agreed upon. The retailers turned directly to Swatch Group Polska seeking intervention when other stores did not stick to the established prices, and also encouraged the supplier to establish minimal retail prices.

The distributors left an electronic trail between themselves proving collusion and price fixing, and also to Swatch Group as the hub, to which the stores could turn to exact ‘consequences’ if other stores ‘did not join’ and ‘honour the maximum rebate’, as one e-mail read. The electronic trail also reveals the companies were aware that price fixing infringes competition, with one saying ‘I’ll omit the prospect of what would happen when the first or subsequent letters from [name of the company] ended up in UOKiK’s hands’.

UOKiK has fined five companies more than 2 million PLN* and ordered them to abandon the illegal practices. The decision is not final and may be appealed in the Court of Competition and Consumer Protection.

Additional information for the media:

Press Office, UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone.: +48 22 827 28 92, +48 22 55 60 314, +48 22 55 60 430
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]

Twitter: @UOKiKgovPL

*Swatch Group Polska - 1 113 119,88 PLN;

Vistula Group - 864 557,34 PLN;

Krakowski Salon Jubilerski - 62 853,60 PLN;

FHU Płonka - 49 851,84 PLN;

Max-Time - 39 454,44 PLN.

Attached files

 

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