The Birking Battle Continues for Hermès
A group of U.S. consumers is urging the U.S. Court of Appeals for the Ninth Circuit to revive their class-action lawsuit against Hermès International SCA, alleging that the luxury fashion house unlawfully conditions access to its coveted Birkin handbags on buyers first spending large sums on other Hermès products. In their filings, the plaintiffs argued that a lower-court judge applied an improper legal standard when dismissing their antitrust claims last year, asserting that they had sufficiently alleged that Hermès’ sales practices amount to illegal “tying” under federal competition law. They contend that requiring consumers to purchase other goods before being allowed to buy a Birkin — a highly desirable, handcrafted bag that can cost tens of thousands of dollars — unfairly forces them to buy products they do not need or want.
In rejecting the original complaint, U.S. District Judge James Donato sided with Hermès in September, agreeing with the luxury brand’s argument that Birkin sales occur within a competitive marketplace and that Hermès’ discretion in how it sells its products does not violate antitrust laws. The plaintiffs, in their appeal, challenged the judge’s definition of the relevant market and argued that the district court applied an overly stringent standard in the early stages of the case. The outcome of the appeals court’s decision could have implications for how antitrust law is applied to high-end retail practices.
