On 23 October 2017 the General Court (GC) handed down a judgment dismissing an appeal by the Confédération européenne des associations d’horlogers-réparateurs (European confederation of watch repairers’ associations (CEAHR)) against the European Commission’s July 2014 decision to reject CEAHR’s complaint over the refusal of several prestige/luxury watch manufacturers to supply spare parts to independent watch repairers. The Commission concluded that there was a limited prospect of finding that the manufacturers’ refusal to make spare parts available beyond their networks of authorised repairers would breach Article 101 or 102 of the TFEU. This represents the second time CEAHR’s complaint has been rejected.
The GC confirmed that a selective distribution system (and, by analogy, a selective repair system) can conform with EU antitrust rules so long as it is objectively justified, non-discriminatory and proportionate, and that these conditions may be fulfilled in relation to the Swiss watchmakers’ repair networks. It agreed with the Commission’s finding that the watchmakers had legitimate justifications for refusing to supply non-accredited repairers, such as the prevention of counterfeiting and the preservation of brand image and high-quality and technologically advanced products. The authorised repairers were selected on the basis of qualitative criteria and the selective systems were open to all independent repairers that satisfied those criteria. The GC also rejected CEAHR’s argument that a selective distribution system is only permitted if it does not eliminate all competition; it is sufficient that it meets the criteria mentioned above.
The ruling also confirmed that refusal to supply by a dominant company constitutes an abuse within the meaning of Article 102 of the TFEU only in certain circumstances, i.e. where there is a risk of all effective competition being eliminated. In the present case, the luxury watch manufacturers’ refusal to supply independent repairers is unlikely to be sufficient to establish abusive conduct. The GC also dismissed CEAHR’s argument that the refusal to supply resulted from an agreement or concerted practice, as the watchmakers had adopted a series of independent commercial decisions over a relatively long period of time.