Swatch Group’s chief executive is appealing for compromise in a protracted battle over ETA’s freedom to make watch movements for competitor brands.
Switzerland’s Competition Commission (COMCO) ruled in December last year that ETA must stop supplying mechanical movements to other watchmakers in 2020.
The December ruling supersedes a settlement between Swatch Group and COMCO in 2013 that set out a staged reduction in supply of ETA movements to other brands to around half the 2013 volume.
That 2013 settlement was designed to prevent ETA building up an overly dominant share of the movement market, giving it to much power and control and driving rivals out of business.
Swatch Group’s CEO Nick Hayek says that the company has followed the 2013 settlement to the letter, and it has had the desired effect on increasing competition.
He told Switzerland’s NZZ newspaper this week that his company had no desire to develop a dominant position in the market and offered to limit supply of movements to a maximum of 400,000 a year over the next two years.
This would guarantee that ETA produces no more than a third of all movements in the Swiss market.
In a strongly worded statement in December, 2019, Swatch Group argued that an abrupt halt to ETA’s freedom to supply other watchmakers in the summer of this year would be damaging, unnecessary and unfair.
“ETA is no longer the market leader in this sector. Due to the settlement reached in 2013 and the will of Swatch Group, production volumes and capacities have been reduced year after year. Other players significantly increased their own production levels and, as in the case of Sellita, far exceeded those of ETA. In 2019, Sellita produced and supplied one million mechanical movements (roughly twice as many as ETA), making it the new market leader in this sector,” Swatch Group’s statement says.