Wanna Be An Activist; The Us Atty Wants Your Opinion

[TJGladeRaider]

As some of you may know, and some probably do not, the USA took on Rolex and the Swiss cartels before many of you were born, the problem being their price control systems. Here is the latest development - February 2006.

USA v Rolex - Show Cause

Here is a commentary cut and pasted from another web site.

Attention AWCI Members: Critical Spare Parts Issue Precedent Looms JIDA's position on the Consent Decree By Bill Nagle, President JIDA In the last issue of Horological times, the AWCI Board of Directors took a position not to support the continuation of the consent decree that Rolex seeks to dissolve. The AWCI Board of Directors fails to think through the ramifications of their action and its effect on the industry as a whole. This is the industry from which YOU derive a living and a future. It is critical that our voices be heard in Washington D.C. on this matter. Retaining the consent decree in total is unlikely, but key portions must be kept in place in the spirit of fairness that US laws are based. Removing the decree in its entirety would allow the luxury brands legal latitude to operate as they have for the past several decades. Rolex has agreed to pay $750,000.00 in order to settle with the United States Department of Justice. The final judgment prohibits certain defendants from imposing use restrictions on watch repairers. The United States charged that Swiss watch companies agreed to regulate the use, distribution, and pricing of watch repair parts. The primary harm that the Final Judgment sought to remedy was cartel behavior led by Swiss industry organizations. Contrary to the legal standards applicable to the termination of an antitrust final judgment with the consent of the United States, "The US has not offered a reasoned and reasonable explanation of why the termination vindicates the public interest in free and unfettered competition". The watch industry has changed due to technological advances during the last 40 years, altering the number of lower-priced units sold in the US. The volume and manufacturers of luxury watches has not significantly changed in terms of units sold. The defendants targeted by the consent decree deal primarily in the luxury watch market, with little or no participation in the low-end market. Therefore using the addition of quartz movements, Timex, Bulova, Seiko, and other low-priced alternatives, (given as a reason to change laws in place governing the luxury watch market), seems to be an incorrect application of the rule of reason in place of the per se rule. The dropping of the consent decree could put Rolex's revised policies in violation of certain Sherman Antitrust Act provisions. These provisions include vertical price restraints in regard to fixing minimum and maximum prices, non-vertical price restraints in regard to spare part resale restrictions, and tying contract violations in regard to the policy voiding warranties if generic parts are used. Material houses will be affected by the dropping of the consent decree, which will in turn have a direct impact on AWCI members' ability to make timely and profitable repairs in their businesses. One fact that may not have been recognized by the AWCI Board of Directors is the true financial history of Material houses compared to the luxury watch brands on AWCI. Did you know that during the past twenty-five years, various material houses (JIDA members) have purchased approximately 80% of the advertising in the Horological Times, which equates to well over $1,000,000. The manufactures/brands only recent contributions come no where close to matching that of the material houses past and present support. Is the AWCI Board of Directors protecting the group that truly pays the bills, or the prestigious brands for which they hope to be associated with? The original judgment has vertical restraints that the Department of Justice deemed necessary as a means of watch parts distribution in the 1960's. This was designed to keep the Swiss Cartel from restricting the flow of parts necessary for the watch repair trade to operate. The "Swiss Cartel", as it was known, may not exist today in name only. The common business practices of today's Swiss Watch Groups, who work together, produces the same result of the illegal Cartel from earlier decades. The companies may have changed their names to "Groups", but what was against the law in 1960 is still illegal today. If you have any questions regarding this important development, please contact your local watch material house. There is a sixty-day public comment period that expires on June 6, 2006. You can send your comments directly to: John R. Read, Chief, Litigation III Section, Antitrust Division, US Department of Justice, 325 7th Street, NW, Suite 300 Washington D.C. 20530 For further information regarding this pending action,

If any of you feel like engaging in a little Rolex Activism, the phone numbers at the US Attorneys Office, and the names of the people handling this case are at the bottom of that pleading linked above.

Tell them that the Swiss Cartels are indeed alive and florishing as evidenced by the ridiculous prices commanded by their products and the price control systems related thereto.

Bill

[TJGladeRaider]

What, no activists?

Bill

[HighDef]

What, no activists?

Bill

If I do not have fake rolexes, why not. I do not want Rolex crosshair in my forehead.

[TJGladeRaider]

If I do not have fake rolexes, why not. I do not want Rolex crosshair in my forehead.

Well, it sure seems that you speak for the majority.

I guess my folks were more of the "throw the bastard's tea in the river," kind of people. What ROLEX and the Swiss Cartel have done is illegal, the US government prosecuted them and they have forced them to consent to an order limiting their behavior -- not that the associated $750,000 fine is likely to stop them.

Calls and letters from people encouraging the government to keep after them could mean something.

Bill

[ubiquitous]

As this particular case directly impacts the servicing of genuine Rolex watches, I am certain that the specific topic of parts supply may be of more interest to the genuine Rolex enthusiast. The parties that have the most vested interest in the matter would be the owners of genuine vintage Sports models. Here's my logic and reasoning behind my statement- As Rolex Service Centers start turning away watches from the 60's/70's (i.e. 1520/5, 1570/5 etc. based watches), the collectors of said watches are going to have to start using resources outside of the typical RSC chain of command; i.e. independant watchmakers. If there are no genuine parts available (only aftermarket), then you can bet that most of the purists will begin dumping their watches and moving on to the manufacturers that actually support their vintage customers. This is already happening to a small degree as many of the serious collectors start moving towards Patek and AP (among many other brands). It's only a matter of time before more people start moving on, and then the vintage bubble will burst, which may have a ripple effect to sales of their modern lines as well (though not in a large impact, as Rolex will always have sales to some extent- There will always be those who want the brand purely for status reasons).

[tech]

I have heard and read of many vintage gen rolex owners having their rollies serviced by the various service centers only to have their vintage/patina'd dials and hands replaced with new ones. The kicker is that Rolex refuses to return the vintage parts to the owner! The service center also claims that they won't work on these vintage pieces unless their mandate is followed. I know many owners are p--ssed off as they have lost that vintage look that so many folks strive for...

Many vintage owners have had to turn to alternative means to get their timepieces serviced....a real turn off if you ask me.

For once, I hope the US Government can get this case right...