Cousins taking on Swatch Group

[GrandS]

The Chinese have been making decent clones of many of the standard ETA movements for a number of years now.

It's not unimaginable to see them supplying cheap, quality component parts to independents in order for them to be able to continue servicing ETA movements.

Nah, they will just supply an entire movement. The old ETA will end up where it belongs. The bin.

[markrlondon]

OK then. It is correct to accept that a manufacturer cannot be expected to carry an unending burden to support its products.

Perhaps too, the combined effects of improvements in production technology and relative increased costs of labour should be recognised. The economic viability of time consuming repairs using low production cost components must have changed the business model.

What I find truly vexing on a forum for watch enthusiasts, is the apparent disinterest, even denial of these developments and absence of debate as to the consequences for watch ownership. Look the other way, keep the party going, just keep spending regardless, Rolex hallowed be thy name etc. Yes, I'm clearly barking.

No, you're not barking.

It is over-simplistic to just say "it's the way it is, move on". In fact the law (Swiss law, British law and EU law (for the time being) might all apply to this case) is there and must be complied with. It is entirely right and proper to use the law to (try to) enforce reasonable and fair commercial dealings if businesses will not do it of their own accord.

"Just moving on" as some people put it is not necessarily the businesslike, mature or sensible thing to do: Sometimes it is more mature, more businesslike and more sensible to put changes to the test according to the laws and jurisdictions that apply. It is not necessarily always the case that businesses can just do what they please or that such decisions need to go unchallenged.

As others have said, it is ironic that it is Cousins initiating this action but I am nevertheless glad that they are doing so. They are in, in my opinion, performing a valuable public service (whether they succeed or fail).

[GrandS]

To be perfectly honest, I think Cousins can go jump in a lake.

[Chris_in_the_UK]

OK then. It is correct to accept that a manufacturer cannot be expected to carry an unending burden to support its products.

Perhaps too, the combined effects of improvements in production technology and relative increased costs of labour should be recognised. The economic viability of time consuming repairs using low production cost components must have changed the business model.

What I find truly vexing on a forum for watch enthusiasts, is the apparent disinterest, even denial of these developments and absence of debate as to the consequences for watch ownership. Look the other way, keep the party going, just keep spending regardless, Rolex hallowed be thy name etc. Yes, I'm clearly barking.

I agree (and I have not previously considered you barking).

The forum dynamics have changed over the years - many will not understand the implications.

[Guitarfan]

The way I see it, Swatch are setting themselves up to follow the Rolex/Patek/etc model of not supplying their parts to other people.

I'm not sure a bunch of laws can stop them doing that when there's clear precedent...

[forpetesake]

Thanks Carlton, Mark, Chris.

I have bought more than a few retail bits and bobs from Cousins over recent years and although I have always found the service to be faultless, don't consider myself qualified to make their appraisal.

If I was a trade customer (presumably with trade terms) relying (but not solely) upon their comprehensive inventory and consistent delivery to make a living, then I would acknowledge their status and allowing for a few mishaps (this isn't like walking into John Lewis), make a fully rounded commercial decision about dealing with them. They evidently have plenty of customers.

Cousins appear to be the only dog in the fight with Swatch, the only one doing any heavy lifting.
Although like a lot of others I'm just wringing my hands, they have my full support.

Peter

[Padders]

Thanks Carlton, Mark, Chris.

I have bought more than a few retail bits and bobs from Cousins over recent years and although I have always found the service to be faultless, don't consider myself qualified to make their appraisal.

If I was a trade customer (presumably with trade terms) relying (but not solely) upon their comprehensive inventory and consistent delivery to make a living, then I would acknowledge their status and allowing for a few mishaps (this isn't like walking into John Lewis), make a fully rounded commercial decision about dealing with them. They evidently have plenty of customers.

Cousins appear to be the only dog in the fight with Swatch, the only one doing any heavy lifting.
Although like a lot of others I'm just wringing my hands, they have my full support.

Peter

Great use of off the shelf metaphors but are you aware of their returns policy or how they react if a parcel is lost in the post and not delivered to you?

[Padders]

To be perfectly honest, I think Cousins can go jump in a lake.

Christ! I have never agreed with you before which means I should probably consider my position since you normally post passive aggressive sh1te designed to cause maximum bother for a the OP. Based on this, maybe Cousins are actually the good guys here

[robt]

Christ! I have never agreed with you before which means I should probably consider my position since you normally post passive aggressive sh1te designed to cause maximum bother for a the OP. Based on this, maybe Cousins are actually the good guys here

Even a broken watch is right twice a day* - of course the Swatch Group should probably jump or be pushed into the same lake, along with a number of other companies. Although this would make an already poor supply chain even worse, so you can't win really. Maybe they should all just stay out of the lake after all. Unless a refreshing swim would simply help invigorate them, which may be all he meant...

* Except GMT and date complications :)

[forpetesake]

Great use of off the shelf metaphors but are you aware of their returns policy or how they react if a parcel is lost in the post and not delivered to you?

This is an enthusiasts and hobbyists forum, so I wouldn't dismiss the validity of your reservations.

I have had trade accounts with various building trade merchants for nearly thirty years, and whilst things have improved in recent years, the larger, dominant players can sometimes act autocratically towards marginal customers. I do believe a 'take it or leave it' attitude is outdated, but trade and retail territory and cultures are not the same. Where I have found the behaviour of trade suppliers to be unacceptable, I have walked away, usually.

At least Cousins are having a go, against a truly autocratic dominant bully.

[GrandS]

Christ! I have never agreed with you before

Congratulations, you finally saw some sense.

[markrlondon]

The way I see it, Swatch are setting themselves up to follow the Rolex/Patek/etc model of not supplying their parts to other people.

That is one opinion. There are other, equally potentially valid, opinions available. The purpose of legal action is to establish which opinion(s) are legally valid and supportable. I would not be surprised if Swiss and UK courts come to differing decisions about which opinions are valid.

[Guitarfan]

That is one opinion. There are other, equally potentially valid, opinions available. The purpose of legal action is to establish which opinion(s) are legally valid and supportable. I would not be surprised if Swiss and UK courts come to differing decisions about which opinions are valid.

Yep, and as in other legal cases, with precedents in place you can predict which opinion will "win" and end up setting the scene for the future...

[markrlondon]

Yep, and as in other legal cases, with precedents in place you can predict which opinion will "win" and end up setting the scene for the future...

Can you specify the precedents that apply to the case in Swiss law or, separately, would apply in English law (were the case to be taken up by Cousins here in the UK)?

[Guitarfan]

Can you specify the precedents that apply to the case in Swiss law or, separately, would apply in English law (were the case to be taken up by Cousins here in the UK)?

No I can't, I'm not a lawyer :)What I meant was the way Rolex/Patek/etc control the supply of their spare parts has been in place for many years and accepted i.e. hasn't been legally challenged. Given that, I'd find it hard to believe it could be proven that Swatch are doing anything illegal. If that were to be the case and subsequently proven, then Rolex and Patek would have to open up their spare parts supply and I can't see that happening can you?

[markrlondon]

What I meant was the way Rolex/Patek/etc control the supply of their spare parts has been in place for many years and accepted i.e. hasn't been legally challenged. Given that, I'd find it hard to believe it could be proven that Swatch are doing anything illegal.

As I said before, that's one opinion or interpretation which may or may not be relevant to the legal arguments over what Swatch have begun to do. What Swatch have now begun to do (not what Rolex or Patek might have done previously) is being tested in a court[*]. Taking the view that Swatch's new policies are the same as Rolex's or Patek's earlier policies is an opinion but whether or not the court would agree that it is relevant or significant has yet to be seen. There is no legal precedent if what Swatch are doing has not been tested in court previously. Whether or not comparisons will be made to previous policies by Rolex, Patek or others remains to be seen; they might be relevant or they might not be.

* = Currently in a court that has jurisdiction at the Swiss end but not a court that has jurisdiction at the UK or EU end.

then Rolex and Patek would have to open up their spare parts supply and I can't see that happening can you?

Yes, if the law requires them to. However, one must also remember that the issue at hand here is primarily a matter between Cousins and Swatch. Whether or not it would affect anything that Rolex or Patek do or do not do is another matter entirely. It all depends on the exact detailed nature of the legal case (which we here don't know in detail) and on the exact contents of any judgments (which no one at all knows yet).

The key point in my opinion is not to make assumptions about what is or is not relevant or precedent-setting. If there has been no previous legal action on this point then it is up to the courts in both Switzerland and the UK and/or EU to decide what previous activities by other companies might or might not be precedent-setting for this particular legal dispute.

[Guitarfan]

You have your opinion and I have mine, lets see how it pans out :)

[markrlondon]

You have your opinion and I have mine, lets see how it pans out :)

The point I am making here is that it only matters what the court decides is relevant. To just assume that what Rolex or Patek allegedly did before will count in or be relevant to this particular case is a dangerous assumption: We don't even know the details of the case so cannot even begin to work out whether what Rolex or Patek did before could be or will be relevant to the arguments in this case. And, furthermore, even if what Rolex or Patek did before is found to be relevant, lack of previous legal action does not necessarily mean that some kind of precedent has been set or accepted. Only the courts can decide that.

[Guitarfan]

Like I said - you have your opinion and I have mine, lets see how it pans out :)

[GrandS]

Imagine the implications if Swatch were forced to supply Cousins. That would certainly set a precedent and Rolex et al. could expect to face similar law suits.

If I was a betting man I would give a snowball more of a chance of staying frozen in hell than Cousins being able to force Swatch to supply parts. Cousins must be rich if they can afford to waste money on what I consider to be frivolous litigation. A certain "highly reputable Swiss Law Firm" will be laughing all the way to the bank.

[markrlondon]

Like I said - you have your opinion and I have mine, lets see how it pans out :)

I have not stated an opinion about what evidence will be relevant to the case in Switzerland, simply because there are no substantive details available to any of us here on which to form any meaningful opinion as to what evidence could be relevant to the case. It's you who has an opinion on the matter of what evidence is applicable to the Swiss case, not me.

The point I have been making is that for you to claim that what Patek or Rolex did before is relevant to the case, when you don't even know the details of the case, is presumptuous. It's relevant in your mind but that tells you nothing about relevance to a court case in Switzerland.

I should also point out that this discussion about what is or is not relevant to the case in terms of evidence is not directly related to the outcome of the case. I think Cousins will most likely ultimately fail (even in an English court). But that still doesn't mean that I have an opinion about what evidence is or is not relevant to a case whose details neither you nor I can currently know.

[Guitarfan]

Blimey, you don't give up do you?

OK, you "win on the internets" or whatever it is you're trying to achieve

[Padders]

Blimey, you don't give up do you?

OK, you "win on the internets" or whatever it is you're trying to achieve

Ask him about the duty payable when you import a watch. He really loves that one!

[markrlondon]

Ask him about the duty payable when you import a watch. He really loves that one!

I leave it to others now. :-)

[Saint-Just]

Blimey, you don't give up do you?

OK, you "win on the internets" or whatever it is you're trying to achieve

It's not a matter of winning, or not. Your opinion that the courts will find against Cousins because of Patek and Rolex at this point is meaningless: a court can base his findings on a precedent case in court, and had either or both of this brands been challenged in court and won then you would have serious point and we would all recognise this. Because that is not the case the courts cannot base their judgment on existing practices, especially since the cases are entirely different (neither Rolex nor PP sold spare parts for watches that were not Rolex (Tudor) or PP) unlike Swatch group which until recently provided possibly 80% + of the (Swiss) watch industry.

[Guitarfan]

Blimey guys, I'm only expressing an opinion in the discussion section on a watch forum! I'm not expecting my words to be held up in a court of law or analysed to the nth degree

Regardless of the minute details that none of us are privy to, it's well known that cross border law cases are complex, expensive and very hard to enforce. I personally feel is a complete waste of time as common sense says that Cousins don't have a cat in hell's chance of winning against Swatch. However the case pans out, the end result will be same I think - Swatch will do what they want to do and no-one will be able to stop them.

[Saint-Just]

Now that is an opinion that holds water. The issue with the previous one (for me) was that you were mixing apples with tomatoes, i.e. You were basing your reasoning on something that was legally baseless ( referring to what the courts would use to base their decision).

[Dougal]

Does anyone know the latest status on Cousins vs. Swatch?

[markrlondon]

From Cousins' news letter just now:-

http://us7.campaign-archive1.com/?u=...0&e=94d2b965f3

Swatch v Cousins
Despite Swatch objections, Swiss Judge agrees Cousins request to limit the case

I am once again pleased to give you another positive update on the action brought against Cousins by Swatch in the Bern Court.

When our Swiss lawyers studied the claim Swatch made, they formed an opinion that Swiss law does not allow such a case to be dragged to Switzerland, and that the real reasons Swatch had made the claim were to try and intimidate us, to drain our resources, and to delay things for as long as possible. We are optimistic that the Bern Court will take a very dim view of such legal tactics.

In our response to the Court, we detailed all the arguments that support this opinion, and requested a ruling from the Judge that he suspend hearing the full case until he had decided whether or not the case was admissible at all. Logic dictates that it makes no sense to spend hundreds of thousands of pounds on legal fees, and days of court time arguing about EU Competition Law, only to find out afterwards that the whole case was not admissible.

On receipt of our request, the Judge forwarded our arguments to Swatch and asked for their response. Unsurprisingly, Swatch did not agree with our challenge, dismissed it out of hand, and requested that the Judge give us very limited time to present our response to the entire case.

However it seems that our arguments about the legitimacy of Swatch’s actions are well enough founded and need to be considered, because the Judge has now issued an order in line with our request, and against Swatch’s preferred procedure. This order greatly simplifies and speeds up matters. In my opinion, this decision clearly shows that the Bern Court does not hesitate when it comes to ensuring that the rules are followed fairly, and to further ensure that the minnows have a genuine opportunity to defend themselves when attacked by the whales. I am grateful to the Judge for his actions in this regard.

The practical upshot of all this is that we will get a much quicker decision from the Swiss court on where the full case will be held. If our points of procedural law win the day, then ultimately the case will return to the English courts where it will be considerably easier to argue a matter of English and EU law. If the Swiss Court does not agree with our arguments, then we will have the more difficult option of arguing the matter in a foreign language some 600 miles away from home.

What Swatch should by now have learned from all this, is that whatever legal tactics they employ, Cousins resolve remains as strong as ever when it comes to obtaining a ruling that their parts embargo breaches English and EU competition law. We continue do everything we can to support our trade customers in their efforts to provide the end consumer with quality services at a fair price.

Kind regards

Anthony Cousins

[walkerwek1958]

Still a chance of a positive outcome, we can still live in hope that David slays Goliath.....or at least fights him to a standstill!.

Paul

[dougair]

Still a chance of a positive outcome, we can still live in hope that David slays Goliath.....or at least fights him to a standstill!.

Paul

I doubt it, I honestly can't see how this is against English or EU competition law myself. Given this has already been going on for several months I suspect cousins have already spent a small fortune on legal fees and other expenses. I can't see this ending well for them.

[Guitarfan]

^ exactly. All they've done up to now is argue the finer points of law at some cost to themselves.

[walkerwek1958]

I hope Cousins get a result out of this, but I fear they won`t. Hopefully Anthony Cousins knows what he's doing and I trust he's shrewd enough to know when to quit.

Some of you will disagree, but forcing Swatch Group to continue supplying third parties is in EVERY watch enthusiast's best interests, directly or indirectly. Restrictive practice is forcing the cost of servicing and repair ever-upwards, making the ownership of a mechanical watch less viable for many.

Anthony Cousins certainly hasn`t won many friends in the past due to the way he's done business, but he's the best hope we've got in this fight. Clearly he's motivated by the desire to protect his own business first and foremost, but if he manages to force some compromise I don`t really care.

Paul

[Guitarfan]

If people don't like Swatch or Rolex's approach to parts buy another more reasonably priced brand e.g. Seiko.

Vive la difference.

[nunya]

I doubt it, I honestly can't see how this is against English or EU competition law myself.

Me either. A company makes parts, for its movements / watches, they own the parts / IP ETC, so can sell or not sell to whomever they choose

Unfair? Yes and restrictive but not illegal

[alfat33]

Me either. A company makes parts, for its movements / watches, they own the parts / IP ETC, so can sell or not sell to whomever they choose

Unfair? Yes and restrictive but not illegal

Out of interest, what if the manufacturer sells some parts to another company. Can that other company then sell those parts which it now owns to anyone that they like? Or can someone stop them?

[Bondeo1980]

First post but I've been watching this with interest. I agree companies are free to sell to whomever they like. However, as far as I understand it this changes if a company has a 'dominant' position in the market. I suspect this case may hinge on proving Swatch are dominant.

Once a dominant position is confirmed then you have to treat all customers equally based on justifiable objective criteria. Interested to see how this develops!

[Guitarfan]

The way I see it they're basically reducing the number of supply outlets to authorised service centres and stopping parts only sales. I don't see how that's abuse of a dominant market position as all service centres will have the same supply of parts. Plus Rolex have been doing it for years!

[dougair]

First post but I've been watching this with interest. I agree companies are free to sell to whomever they like. However, as far as I understand it this changes if a company has a 'dominant' position in the market. I suspect this case may hinge on proving Swatch are dominant.

Once a dominant position is confirmed then you have to treat all customers equally based on justifiable objective criteria. Interested to see how this develops!

But if they only supply their own service centres they are not giving preferential treatment to some over others as they are supplying the parts to themselves. So they are treating everyone equally...by not supplying them?

[nunya]

Out of interest, what if the manufacturer sells some parts to another company. Can that other company then sell those parts which it now owns to anyone that they like? Or can someone stop them?

Of course the other company can sell those parts it now owns to anyone. No one can stop them, but the manufacturer may not resupply the other company

[dougair]

I must admit I am one of those weird people that will always send my watches back to the OEM. It gives me a warm fuzzy feeling, like getting your car service book stamped by a main dealer.

[markrlondon]

I hope Cousins get a result out of this, but I fear they won`t. Hopefully Anthony Cousins knows what he's doing and I trust he's shrewd enough to know when to quit.

Some of you will disagree, but forcing Swatch Group to continue supplying third parties is in EVERY watch enthusiast's best interests, directly or indirectly. Restrictive practice is forcing the cost of servicing and repair ever-upwards, making the ownership of a mechanical watch less viable for many.

Anthony Cousins certainly hasn`t won many friends in the past due to the way he's done business, but he's the best hope we've got in this fight. Clearly he's motivated by the desire to protect his own business first and foremost, but if he manages to force some compromise I don`t really care.

Agreed.

It is foolish to think otherwise.

[Bondeo1980]

But if they only supply their own service centres they are not giving preferential treatment to some over others as they are supplying the parts to themselves. So they are treating everyone equally...by not supplying them?

The problem for Swatch is that they were supplying everyone previously. If they are found to be dominant then it could be argued they are punishing everyone they have stopped supplying. From similar cases I've seen (albeit in different industries) I think Cousins have a decent case.

[markrlondon]

If people don't like Swatch or Rolex's approach to parts buy another more reasonably priced brand e.g. Seiko.

Vive la difference.

It's important to remember that this is not about sales of new watches but about maintenance of previously bought watches, watches that were quite possibly bought under the understanding that parts would not be artificially limited and that servicing would therefore be open to competitive market forces.

Me either. A company makes parts, for its movements / watches, they own the parts / IP ETC, so can sell or not sell to whomever they choose

Unfair? Yes and restrictive but not illegal

Whether or not particular unfair and restrictive business practices ares illegal is for the courts to decide. This has not yet been decided. It should be noted that Swiss courts and UK courts may have different opinions and different laws may apply.

It is also worth noting that although Swatch is headquartered in Switzerland, if it supplies UK customers through a UK subsidiary then it must comply with UK (and for the time being EU) law, no matter what the Swiss HQ or the Swiss courts say.

It is further worth noting that just because other companies do it does not mean that it is legal. Common practice does not necessarily signify legality (for example, in another business environment, PPI mis-selling was very common practice but was illegal).

[dougair]

It's important to remember that this is not about sales of new watches but about maintenance of previously bought watches, watches that were quite possibly bought under the understanding that parts would not be artificially limited and that servicing would therefore be open to competitive market.

Really Mark? Do you honestly think that the vast majority of buyers even realise their watches will need to be serviced and if they do that they would consider any option other than taking it back to the AD...WIS are in the minority I would say, I'm guessing the majority of buyers won't give it a second thought.

[Guitarfan]

Exactly. It's only a minority of WIS folk who will care.

[lordloz]

It's important to remember that this is not about sales of new watches but about maintenance of previously bought watches, watches that were quite possibly bought under the understanding that parts would not be artificially limited and that servicing would therefore be open to competitive market forces.



Whether or not particular unfair and restrictive business practices ares illegal is for the courts to decide. This has not yet been decided. It should be noted that Swiss courts and UK courts may have different opinions and different laws may apply.

It is also worth noting that although Swatch is headquartered in Switzerland, if it supplies UK customers through a UK subsidiary then it must comply with UK (and for the time being EU) law, no matter what the Swiss HQ or the Swiss courts say.

It is further worth noting that just because other companies do it does not mean that it is legal. Common practice does not necessarily signify legality (for example, in another business environment, PPI mis-selling was very common practice but was illegal).

I agree with you Mark and Paul who's usually very logical and balanced on matters and he has first hand experience of parts supplies.

Is it not similar to the legislation that makes car manufacturers supply spares to independent garages and allows them to also make repairs without invalidating warranties.....?

With value of pound decreased and fuel costs rising it is in everyone's interest WIS or not to keep availability of parts especially for common models like 2824 & 2829's & repair costs down by being able to use independent repairers.....

[walkerwek1958]

Thesedays I think more people are ignorant about the need to service watches, it's an age/generation thing. However, people who bought watches 15-20 years ago were probably more savvy. In those days it didn`t cost a lot to have a watch serviced; even accounting for inflation I reckon the prices charged were around 50% of today's figures in real terms. The high service cost is a relatively recent thing, it's been driven by the manufacturers. Around 8 years ago I paid £175 to have a Rolex serviced by an accredited repairer. Taking inflation into account that's only around £240 in today's money, yet the same service would now be approx £450......see what I mean? The guy who pays £5-£6K for a new watch is implicitly signing on to ownership of a luxury item and accepting the high maintenance cost, whether he realises it or not. It's the folks who bought watches 15-20yrs ago who are being screwed in my opinion, they bought a watch that was around 50% cheaper in real terms and cost a lot less to maintain. The guys who bought an Omega SMP in year 2000 for around £1000 are now being faced with service costs of £350 because Swatch/Omega have all but killed off the true independents. So what does the guy with the 16yr old SMP that needs servicing do when he's told it'll cost £350?.......his jaw sags, then he sticks the watch in the back of a drawer and stops using it. If he's lucky someone like me sorts it out for under half that money using their ever-dwindling stock of parts, a situation that isn`t sustainable unless Swatch Group change their policy. The small repairer, or the guys who were happy to service watches as a spare time hobby/second job are effectively being squeezed out. Owners should have a choice who they send their watch to, some will always opt for the manufacturers service centre and anjoy the warm feeling (at a price) whilst others will be happy to send it elsewhere. That's how it should be.

I`m surprised that Swatch Group are willing to loose the income stream from selling parts; if they think the same turnover of parts will continue via their accredited repairers they're sadly deluded. There will be more second-hand parts sold on ebay, parts that should've been scrapped because they're worn or questionable, but in the absence of new replacements these items now have value. I`m seeing it already, I`m very careful about buying parts thesedays because I know this is going on.

The answer is simple; make parts readily available as they have been in the past.

Paul

[Guitarfan]

The world has changed a lot in 20 years and expecting things to stay the same forever is cloud cuckoo land.

Today mechanical watches from the top brands are a luxury item and looking after them is now the domain of the manufacturer. It's costly and I'm sure buyers know this.

Omegas on the cheap was an incorrect state of the brand in the nineties which has now been rectified.

[Guitarfan]

Is it not similar to the legislation that makes car manufacturers supply spares to independent garages and allows them to also make repairs without invalidating warranties.....?

I don't think so. You can replace an Omega with a cheap G-Shock that will do the same job. That doesn't apply to cars and vans which people may need for their job/business etc.