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As an economist, I provide an in-depth analysis of the recent lawsuit filed against luxury brand Hermès, alleging that the company's sales practices for its famous Birkin handbags violate federal and state competition laws. I break down the key economic issues in the case, including:
The alleged tying arrangement that forces customers to buy other Hermès products to access Birkin bags
Defining the relevant product markets and assessing Hermès' potential market power
Evaluating the economic impact of the alleged tying and the amount of commerce affected
Analyzing the federal and state antitrust laws at play, including the Sherman Act, Clayton Act, and California's Cartwright Act and Unfair Competition Law
I also explore the potential for a similar antitrust case against luxury watch brand Rolex over its "waitlist" system for sought-after steel sports models like the Daytona and Submariner. While there are some differences between the Hermès and Rolex situations, I delve into the economic factors that could make a Rolex lawsuit feasible, such as:
Defining the relevant markets for different Rolex models and assessing cross-elasticity of demand
Analyzing Rolex's market power and potential coercion of customers through its waitlist system
Evaluating the economic impact and any procompetitive justifications offered by Rolex
Whether you're interested in the economics of luxury goods, the application of antitrust principles to high-end fashion and watches, or just want to understand the potential implications of this major lawsuit, this video offers an economist's perspective on a complex and fascinating legal battle.
#HermèsLawsuit #AntitrustEconomics #BirkinBag #RolexWaitlist #LuxuryGoods #MarketPower #TyingArrangements #ShermanAct
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