Parts restrictions

For anyone who thinks that the practices of watch companies to restrict parts is not legal, and if you live in the US, I would encourage you to write a letter to your congressman (or woman).

Right now Mr. Andre Fleury - watchmaker in California (who was involved in the class action suit against Cartier several years ago) is working through his congressman (Huffman) to get an investigation started with the DOJ/FTC. I would encourage you as watch owners to write your congressman and ask them to look into this matter, and support the start of a formal investigation.

This appeal has gone out to many watchmakers and quite a few states are involved at this point, but this issue is not really about the remaining 3,000 or so watchmakers in the US. It is about the consumer, and without the voice of the consumer involved it will be difficult for this to get enough traction to make anything happen.

This is something you can do directly to possibly impact these restrictions that will affect you all eventually.

Cheers, Al

Abandon, no. Restrict, yes.

The Swiss are smart enough to know that this isn't the 1950's anymore. Their most profitable markets are on the high end. They could care less about the low end, with the exception of Swatch, which are considered disposable watches.

Now that there are no independent US watch distributors and very few independent dealers or parts suppliers anymore, even a victory in court is a loss. The fact is that you cannot force a business to sell something they don't want to sell.

It's a sad state of affairs without a real answer. I feel bad for those caught in the middle. Our Congress can't solve big issues like the federal deficit or the defense of our country, and we think they are going to pay attention to this?

Good luck with that.
gatorcpa

I have personally witnessed the effect of practices such as these. A dear friend of mine here in Los Angeles produces his own line of inexpensive watches. Some of his most profitable models featured ETA quartz movements, which enabled him to label the watches "Swiss Movement". When ETA first put the big squeeze on these movements about 10 years ago it brought him close to financial ruin.

I sent a message to my local congressman per @Archer's suggestion. The text is provided below. After cutting out the part about my friend's experience, this message could be copied and pasted by any US-based member of this forum and sent to his/her congressman/congresswoman.

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Swiss Watchmakers: Restricting Availability of Parts

Dear Congressman Sherman

I would like you to please contact Congressman Jared Huffman (California 2nd District) and offer your support in his effort to have the Federal Trade Commission open an investigation into certain unfair and damaging business practices of Swiss watchmakers. These practices include deliberately restricting the availability of Original Manufacturer parts in order to reduce competition from independent watchmakers in the United States. I personally witnessed the damaging effect of these practices, when a Los Angeles-based watchmaker friend of mine had to take out a second mortgage on his home in order to keep his business afloat after Swiss watchmakers suddenly, and without prior notice, cut off his supply of key watch components. The results of practices such as these include economic hardship for watchmakers in the United States, and artificially high consumer prices for finished and repaired watches in the United States. I urge you to contact Congressman Huffman regarding this matter as soon as possible.

Sincerely,

It would make me feel better if the fight didn't need to happen, but fighting is better than rolling over and taking it up the arse. But hey take it up the arse if it makes you feel better. 😉

Thanks to those who have done something. I appreciate those who have the time and will actually writing a short letter and sending it off for the benefit of all.


Well you can, and the US did for many years (Rolex Consent Decree of 1960). It can be done again and to for those who say it can't, the history of this fight proves otherwise. GIYF

It's unfortunate that the main body representing watchmakers in the US was duped into thinking that if they agreed with the termination of the consent decree in 2006/2007, that their proposed system to certify all watchmakers who wanted to be certified would be embraced by all the brands, and the parts would follow from all the brands. I can tell you that really hasn't worked out they way they hoped, but I'm sure the plan from the manufacturers is right on track as they thought it would be...

Here is the 2006 press release from our Department of the Justice on the vacating of the 1960 Rolex Consent Decree:

http://www.justice.gov/archive/opa/pr/2006/February/06_at_105.html

Now I haven't read the whole 1960 document, but I don't see anything in the above explanation that previously forced the companies to sell any part to any supplier or watchmaker that wanted to purchase them. It did prohibit Rolex and the other 11 defendants (I presume that Omega was among them) from "price fixing" practices on watches, parts and specialized watchmaking equipment at that time.

It also didn't address the process of watchmaker "certification" that the companies are now using to determine to whom they will or won't supply parts. As we have seen here before, that process can be very capricious, and is likely administered more on the basis of strategic location of brand authorized repair shops than the actual quality control standards of the watchmaker in charge.

In other words, this is more of an attempt to control distribution, and not "step on the toes" of factory-owned facilities. Whether this violates the spirit of the 1960 or 2006 agreements, I leave to the anti-trust lawyers in the audience.

I highly doubt our Congress cares. As stated previously, go try to buy parts for electronics products like TV's or stereo equipment if you want to see how large companies treat their customers.

The Swiss didn't write the book. They just stole a page from the Japanese!
gatorcpa

Please read this, written by the AWCI lawyer* at the time Rolex was being fined $750,000 for violating the terms of the consent decree...

http://www.awci.com/wp-content/uploads/documents/ResponsetoDOJpressrelease.pdf

Please pay particular attention to his summary of the restrictions under the original consent decree:

"Rather than going to trial, Rolex settled with the Justice Department in 1960 and entered into the Consent Decree. According to the Justice Department, the Consent Decree imposed the following three restrictions on Rolex:

(i) Rolex could not fix or control the markup or the maximum or minimum price at which its watches and watch parts were sold by its U.S. authorized dealers;

(ii) Rolex could not restrict the resale of its spare parts by its U.S. authorized dealers; and

(iii) Rolex could not institute a policy prohibiting its U.S. authorized dealers from repairing Rolex watches that contained nonRolex spare parts."

Please note the section I have highlighted. Yes this does not address getting the parts directly from Rolex, but if I buy from them, the local watch material supplier, or the dealer it does not matter - access is access to the watchmaker.

* well their former lawyer anyway...long and sordid story to say the least...

Also, I don't think you read this summary from the DOJ you linked to very well - from your link:

"In today’s filing, the Department said that certain provisions of a Rolex policy statement violate the decree by placing restrictions on the use, resale, and pricing of watch parts purchased from Rolex."

It is undisputable fact that this decree prevented Rolex from restricting sales of spare parts from their dealers.

Cheers, Al

I am talking about access to parts. As I said above, I don't care if I get the parts from a dealer, a watch material supplier, or directly from the brand - I am fine with any of those distribution models. In fact I would prefer if we went back to using the watch material houses as the primary suppliers.

You are confusing theory with the way things actually work. There is a reason Rolex is considered the big green bully of the watch world (but they are certainly not alone). Rolex does limit 3rd party repairs of their watches - by limiting parts distribution. No there is no Rolex security guard in my shop making sure that I don't touch a Rolex, but you can't repair watches that you can't get parts for.

Contrary to your belief, Rolex do control what happens to parts after they are sold to an AD or authorized repairer - parts are serialized and records must be kept of where every part is used, and those records will be checked at random. You are at very high risk of losing your parts account if you sell a part, use a part that is not meant for a specific model on another model, etc. Sure, they don't control it directly, but the threat of losing your account is hanging over your head every day for many reasons, and anyone in their right mind is not going to risk losing their account by selling parts. I can assure this method of control is deliberate, and quite effective at limiting the trade in modern Rolex parts.

Omega is not yet at this level of control (they don't ask me what I am servicing or where I am using the parts I buy), but it would not surprise me if it's coming down the road.

If you were a Rolex AD, did millions a year in Rolex business (you have to have this level just to be a dealer), would you sell me a new set of hands for a Daytona, or a new crown for a Sub if it meant risking your dealership? Not likely. Very effective control over resale of parts is the result. It's not a theory, it's the way things actually happen. The consent decree prohibited this requirement not to resell parts - if Rolex wasn't controlling this resale then there would not have been a reason to include it in the consent decree - that alone should tell you they can (and now do) control resale.

Cheers, Al