French luxury house Hermès faces an antitrust lawsuit in California around its Birkin handbags.
The suit alleges that Hermès violates antitrust law by “tying” the sale of one item to that of another, as its associates push customers to buy other products to get an opportunity to buy the company’s Birkin handbags, Reuters reported Wednesday (March 20).
Hermès did not immediately reply to PYMNTS’ request for comment.
The handcrafted leather Birkin handbags, which can cost thousands of dollars each, are not available online and are not displayed for sale in the company’s brick-and-mortar stores, according to the report.
Instead, only customers who are “deemed worthy” of purchasing the handbags are shown the products in a private room, the lawsuit alleges, per the report.
Hermès instructs its associates to use the Birkin bags as a way to “coerce” customers to buy other products, the suit alleges, according to the report.
The lawsuit seeks class action status for U.S. consumers who bought, or were asked to buy, Hermès goods in order to purchase one of the handbags, the report said. It also seeks unspecified damages and a court order barring the alleged anticompetitive practices.
The Hermès Birkin bag has become one of the most coveted and recognized handbags in the world, catapulting Hermès to new heights of popularity and cementing its status as a symbol of luxury, PYMNTS reported in July 2023.
Hermès has mastered the concept of defining luxury, not only by establishing top-tier pricing but also by deliberately cultivating scarcity and waitlists for its most coveted items, like the Birkin bag.
In March 2023, the luxury fashion house brought its scarcity model to the beauty industry, expanding its beauty category with all-new products and looking to bring its tried and tested business model along with them.
In an earlier antitrust class action targeting luxury companies, a United States judge dismissed a suit in March 2023. That suit alleged that Saks Fifth Avenue and various fashion designers had colluded to prevent luxury workers’ mobility and to keep wages artificially low in violation of antitrust law. The judge determined that the legal action was no longer applicable due to its exceeding a four-year window for filing and that not enough evidence was provided to show any potential harm to industry competition.
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