The EssilorLuxottica merger and the ensuing monopoly lawsuit have some very interesting details. While Luxottica is not a single-price monopoly and does not control the supply chain, it has increased the price of aviator glasses and manipulated the eyewear market. This article examines the details of Luxottica’s monopoly lawsuit and explains what the implications are for other companies that compete with Luxottica.
EssilorLuxottica is not a single price monopoly
It’s important to remember that EssilorLuxottica is a relatively new company, with many rivals in developed markets. As co-founder of Specsavers, Doug Perkins recently warned, that EssilorLuxottica is investing hundreds of millions of pounds into new technologies and may threaten high-street opticians. But despite these concerns, the company is not a monopoly, and shareholders will have no way to stop its expansion.
If Luxottica and Essilor were truly a monopoly, they would have a market share of between 80 and 10 percent. Their competition would include conglomerates and independent optometry practices. The combination of the two companies would also result in fewer choices for consumers and fewer high-quality products. Nevertheless, these companies do not meet the definition of a monopoly, because they are vertically integrated, rather than a single, price-fixing corporation.
Despite the massive market share, the merger of EssilorLuxottica is unlikely to result in a single-price monopoly. Both companies have unique design patents, but they have competitors and will compete to retain the business. EssilorLuxottica is not a single price monopoly, but it is a multi-billion-dollar conglomerate.
Luxottica does not control the supply chain
Luxottica has a responsibility to ensure that the suppliers it deals with comply with its codes of ethics, standards, and LRSM principles. The company oversees compliance by its suppliers and has adopted corrective actions when these principles are not met. It also develops and implements training initiatives for its employees. It is not possible for Luxottica to fully control the supply chain, which includes several third-party stakeholders.
Regardless of whether the supplier is a Luxottica reseller or an independent vendor, you will still have to comply with the company’s Code of Ethics and any applicable laws and regulations. The company does not control the entire supply chain, but it supervises the compliance of its suppliers and manufacturers. Employees are required to follow the Code of Ethics as a condition of their employment. Training is also offered for compliance with the law and Luxottica’s Code of Ethics.
Luxottica has increased the prices of aviator glasses
Luxottica has increased the price of aviator sunglasses by as much as 200 percent, but why? The company owns EyeMed, the nation’s second-largest vision care insurer, and has a near-monopoly on eyewear. With this level of control, the company can charge as much as they want. But is that the best move? Is it worth it? Read on to find out.
First of all, Luxottica has partnered with several luxury brands. In 1988, it made a deal with Armani, one of the most fashionable Italian fashion houses. This partnership transformed the glasses from medical devices to fashionable items, which made them more desirable and expensive. The Luxottica aviator glasses now sell for 20 times what they cost to produce. While these increases are not sustainable, they are a good sign for consumers.
Luxottica has manipulated the eyewear market
With its dominant position in the high-end eyewear market, Luxottica can set prices close to what consumers will pay. A more competitive industry tends to encourage constant innovation and force prices down to the cost of manufacturing. By engineering prices for its brands, Luxottica has managed to increase its profits and influence the market. This practice has led to a class-action lawsuit filed on behalf of Canadians who have purchased Luxottica eyewear since March 12, 2010.
Despite the monopoly in the eyewear market, Luxottica has also been accused of price-fixing. CBS 60 Minutes reported that half of the world’s population wears eyeglasses made by Luxottica. This little-known Italian company has gained control of a significant portion of the eyewear industry and has manipulated prices to increase its profits. The company has been caught up in legal issues regarding market dominance, but it has continued to manufacture and sell eyeglasses that are more expensive than other brands.
