Rockport Importer Fined $3 Million for Blocking Online Sales

Original's, the Israeli importer of Rockport shoes, has agreed to pay a NIS 3 million fine as part of a consent decree with the Israel Competition Authority. The company was accused of assisting in blocking the international Rockport website for Israeli shoppers, thereby directing them to the local, more expensive site. This action potentially caused consumers to pay higher prices for shoes they could have purchased more affordably in the U.S.

Following an investigation by the Competition Authority, the ability for Israelis to access the U.S. Rockport website has been restored. Original's agreed to the fine without admitting guilt, and the authority has agreed not to take further action against the company or its officers. The decree is now open for public comment for 30 days.

Original's is owned by I.E. Eyal Ltd., which also operates the Original's and Factory 54 retail chains. This company is a subsidiary of the Al-Shad group, controlled by the Irani family, which imports numerous other brands like UGG, Birkenstock, and Dr. Martens, and officially represents brands such as Tommy Hilfiger, Lacoste, and Calvin Klein in Israel.

The Competition Authority stated that the issue arose from price differences between Israel and the U.S. Israeli consumers were reportedly accessing the U.S. Rockport site for price comparisons and personal imports. When Original's raised this with the global brand owner during commercial negotiations, the owner offered to block Israeli access to the U.S. site and redirect them to Original's Israeli site. Original's provided the necessary information for this redirection, despite claiming the proposed solution was unsuitable for the issue they raised.

This case highlights a practice where international suppliers block sales to Israel at the request of or in cooperation with official Israeli importers, hindering parallel or personal imports. Similar complaints have previously been filed regarding brands like Adidas, Mango, and Levi's on ASOS, and Solgar and Tony Moly on iHerb.

Recent legal changes, including a September 26, 2023, amendment to the Competition Law, prohibit direct importers from actions that harm parallel or personal imports. This includes sharing supply chain information that could impede competition from parallel imports. The Competition Authority issued guidance on this matter in March 2023 and has since proactively contacted 13 major direct importers to identify potential violations.