Luxury brands thrive on exclusivity, but when does a company’s sales strategy become legally problematic? French fashion house Hermès recently found itself facing a class-action antitrust lawsuit in California over its “pay-to-play” policy for the coveted Birkin bag – one of the most sought-after status symbols in the world. If you’re not familiar with it, Birkin prices range from $10,000 to $16,000 for a standard leather Birkin to $50,000 to $100,000 for rare leather materials, and some even sell for more than $500,000 in auctions such as the Diamond Himalaya Birkin.

Due to Hermès’ strict sales policies and the high demand, most buyers cannot walk into a store and purchase a Birkin off the shelf. Instead, customers are often expected to develop a purchase history with the brand, and it is exactly this that triggered a legal complaint in the US. A lawsuit, filed in California federal court in January 2024 by plaintiff Shirley Xu, alleges that Hermès forces customers to buy other, less desirable items such as scarves, belts, shoes, and jewelry before granting them access to purchase a Birkin. This practice, known as tying, is a potential violation of U.S. antitrust law, which prohibits companies from conditioning the sale of one product on the purchase of another.

Xu, a California resident, claims that Hermès’ practice artificially inflates demand, unfairly pressures consumers into spending more money than they originally intended, and ultimately stifles competition. The lawsuit argues that customers are not merely paying for a bag, but for the privilege of being “allowed” to buy one, creating a coercive, anti-competitive sales model. While this kind of scarcity marketing is a well-established tactic in the luxury industry, what works in one country may be illegal in another. In Europe, bundling practices as Hermes’s are often tolerated, but in the U.S., they can trigger legal scrutiny. 

The Hermès lawsuit highlights a fundamental challenge for global brands—striking the right balance between exclusivity and compliance. What is considered exclusivity in Paris may be seen as anti-competitive in California. As luxury brands continue to expand across international markets, they must carefully navigate not just cultural preferences but also legal frameworks to avoid costly litigation and damage to their image.