Luxottica Class Action Lawsuit Claims Consumers Are Overcharged for Eyewear: Ray-Ban, Versace

Eyewear company Essilor-Luxottica is facing a class action lawsuit alleging it has engaged in unlawful and anticompetitive agreements that allow it to charge supra-competitive prices for eyewear, resulting in consumers overpaying for the products.

Class Action Lawsuit Alleges Luxottica Engages in Anticompetitive Conduct

According to the Luxottica class action lawsuit, Essilor-Luxottica currently controls as much as 80% of the global eyewear market. In addition to producing and distributing eyewear under exclusive licenses for the world’s fashion houses, the company also promotes and sells eyewear under several famous brand names.

“Luxottica and the fashion houses are competitors,” plaintiff Jonathan Pezzente says in the Luxottica eyewear class action lawsuit. He says they use licensing agreements to “exercise strategic control over the price and supply of eyewear.”

“Luxottica and the fashion houses have manipulated the eyewear market for their mutual benefit to charge supra-competitive prices, in breach of the Competition Act and the common law,” the Luxottica class action lawsuit alleges. Pezzente says he seeks to hold Luxottica accountable for its unlawful conduct.

Pezzente filed the Luxottica class action lawsuit on behalf of himself and a proposed Class of all persons in Canada who purchased eyewear manufactured or sold by Luxottica since March 12, 2010.

Luxottica Dominates Global Market for Eyewear 

According to the Luxottica class action lawsuit, the global market for eyewear was nearly $155 billion in 2017. The eyewear market includes prescription frames, sunglasses and fashion accessories. Luxottica reportedly controls about 60% of the global market and about 40% for retail globally.

Since being founded in Agordo, Italy in 1961, Luxottica has expanded to now operate in 150 countries. Ij addition, the company has acquired an extensive retail network of 9,000 stores, which include LensCrafters, Oakley, Pearle Vision, and Sunglass Hut.

In addition, Luxottica owns a number of popular eyewear brands, including Vogue Eyewear, Persol, Ray-Ban, Oakley, and Alain Mikli. Luxottica also has more than 20 licensed brands, including Armani Exchange, Burberry, Chanel, Coach, DKNY, Giorgio Armani, Tiffany & Co., Ralph Lauren, Prada Eyewear, Valentino, Tory Burch and Versace.

Luxottica sells to third-party sellers across Canada, including ophthalmologists, optometrists, opticians and other sellers of eyewear.

The eyewear company does not disclose to consumers that it is the exclusive licensee, manufacturer and distributor of all eyewear it sells, according to the Luxottica class action lawsuit.

Luxottica Licensing and Sale Agreements are Unlawful, Class Action Says

Fashion houses are reportedly horizontal competitors with each other and with Luxottica in the eyewear market. According to the Luxottica class action lawsuit, Luxottica has entered into a series of licensing agreements with several famous fashion houses since 1988 that allow for exclusive multi-year licenses for the design, manufacturing and worldwide distribution of eyewear sold under the popular brand names of the fashion houses.

Luxottica also allegedly enters into sales agreements with competing manufacturers that provide multi-year licenses for the distribution and sale of eyewear. The company reportedly pays royalties to competing manufacturers on a portion of sales of eyewear sold at Luxottica’s retail outlets.

Under the terms of these licensing agreements, Luxottica is reportedly designated the agent of the fashion houses and is responsible for making pricing decisions.

“The Fashion Houses and the Competing Manufacturers entered into the Licencing Agreements and Sales Agreements with Luxottica (and through it, their competitors) with the intention of benefitting from the coordination of distribution and pricing, access to information and especially pricing information, and the ability to charge supra-competitive prices for their eyewear, including through the payment of royalties by Luxottica,” the Luxottica class action lawsuit says.

Pezzente argues that these licensing and sales agreements are unlawful agreements under the terms of the Competition Act.

He claims that Luxottica’s control of the price of eyewear on behalf of itself, fashion houses and competing manufacturers has allowed the company to charge super-competitive prices for all eyewear it sells, which causes customers to pay inflated prices for the eyewear.

Luxottica has been unjustly enriched due to its unlawful actions, and therefore Class Members are entitled to restitution in the amount they allegedly overpaid for eyewear, Pezzente argues.

What do you think of the Luxottica eyewear class action lawsuit? Let us know your thoughts in the comments section below.

Pezzente is represented by Mathew P. Good of Good Barrister and Anthony Vecchio QC of Slater Vecchio LLP.

The Luxottica Eyewear Class Action Lawsuit is Jonathan Pezzente v. Essilor-Luxottica S.A., et al., Case No. 232962, in the Supreme Court of British Columbia, Canada. 

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