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Hermes Faces Renewed Antitrust Claims Over Birkin Bag Sales Practices

By  |  October 14, 2024

In a renewed attempt to hold French luxury brand Hermes accountable for alleged antitrust violations, a group of U.S. consumers has filed an amended lawsuit, maintaining that the company is forcing buyers to spend significant sums on other products before they are granted access to purchase the highly sought-after Birkin bag. According to Reuters, the plaintiffs, three California residents, submitted their third complaint on Friday, adding further details and accusations in hopes of swaying a skeptical federal judge in San Francisco.

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    At the heart of the lawsuit is the contention that Hermes restricts the sale of its coveted Birkin bags to customers with what it calls a “sufficient purchase history.” These bags, which are handmade and can command prices running into tens of thousands of dollars, are often seen as a symbol of luxury and exclusivity. The plaintiffs argue that this practice violates U.S. antitrust law by tying the ability to purchase a Birkin bag to the obligation of buying other Hermes products, a practice known as “tying” in legal terms.

    In addition to their original antitrust claims, the consumers have now introduced allegations of false advertising and fraud. They claim that Hermes and its sales staff are misleading customers, leading them to believe that buying ancillary products such as belts, scarves, or other accessories will eventually result in an opportunity to purchase a Birkin bag. Per Reuters, the revised complaint alleges that many of these customers never actually get the chance to buy the bag, despite their significant purchases.

    Related: Hermès Faces Antitrust Suit Around Birkin Handbag Sales Practices

    Hermes has consistently denied any wrongdoing. The company has defended itself by asserting that its practices are not illegal and arguing that the claims are exaggerated. During a hearing in September, U.S. District Judge James Donato, who previously worked as an antitrust lawyer, expressed skepticism regarding the case. According to Reuters, Judge Donato remarked that Hermes, as a private business, has the right to decide how to manage its inventory and pricing, even if that includes making a limited number of Birkin bags available at exceptionally high prices. “Hermes can run its business any way it wants,” the judge stated, adding, “If it chooses to make five Birkin bags a year and charge a million to them, it can do that.”

    Donato also suggested that the company’s actions might actually enhance market competition by providing opportunities for other luxury brands to attract customers who do not wish to spend heavily on additional Hermes products. “If Hermes is going to make you pay a fortune for their bag,” he commented, “they are leaving the ground open for every competitor.”

    The legal battle, now in its third round of revisions, is being closely watched by both legal experts and luxury industry insiders.

    Source: Reuters