Is It a Bag or a “Tie”? The Case of The Birkin

While Hermès’ Birkin handbag may seem to merely be another expensive item, it is unlike most products sold in luxury retail environments. This bag is scarce and is therefore allocated through a controlled distribution process rather than being readily available to walk-in customers. [1] 

In 2024, consumers filed a lawsuit against Hermès alleging that the company required customers to purchase additional Hermès merchandise prior to being offered a Birkin bag–therebycreating a “buy-to-be-offered” practice that plaintiffs claimed violated §1 of the Sherman Act, along with related claims under California law. [2] The case of Cavalleri v. Hermès International was dismissed with prejudice on September 15, 2025 and now serves as a leading case study illustrating the difficulty of applying modern luxury-access business models to the traditional tying doctrine. [3]

Tying law applies to situations in which there are two products (the “tied” product and the “tying product") and the seller uses its power over the tying product to require consumers to buy the tied product. [4] In this way, the seller may harm competition in the tied product market. The Birkin allegations seem to fit this paradigm: consumers alleged that the “tying product” was an opportunity to buy a Birkin and the “tied products” were all other Hermès goods bought to create a purchase history. [5] However, antitrust law is not a general fairness statute; itis intended to protect competition rather than exclusivity or customer disappointment. [6] Even if a practice is frustrating or costly, it may not violate the Sherman Act. [7]

The majority of tying claims are brought under Section 1 of the Sherman Act, which prohibits contracts, agreements or conspiracies that restrain trade. [8] Tying claims sometimes include Section 2 if plaintiffs believe that the defendant has used its market power to exclude competitors. However, courts interpreting Section 2 are generally reluctant to extend liability to ordinary business choices. [9]  For certain types of goods-sales transactions, Section 3 of the Clayton Act may also be relevant to tying claims, since it prohibits conditioning sales under the risk of substantially decreasing competition or creating a monopoly. [10] In a typical tying case, courts require at least two separate products, some evidence of conditioning or coercion, significant market power in the tying product market, and a substantial effect on commerce in the tied product market. [11]  Although courts have historically referred to tying as “per se” illegal, many recent court decisions now establish a higher burden of proof for demonstrating market power and competitive harm.[12] 

The Supreme Court’s decisions reflect this modern restraint. In Jefferson Parish, the Court identified the basic logic of tying while also stating that commercial relevance and market power are both critical factors when determining whether condemnation is warranted. [13] Later, the U.S. Supreme Court held in Illinois Tool Works, Inc. v. Independent Ink that no assumption can be made about market power based on the mere existence of a patent. [14] Instead, proof of market power must be provided. The rationale for this approach to luxury markets is that even if a product enjoys significant demand or prestige, it does not automatically create an antitrust monopoly. [15]  Such a monopoly may exist, however, if the plaintiff defines a coherent and plausible market and demonstrates that consumers within that market do not have viable alternatives. [16] 

This brings us to the central obstacle in Cavalleri: market definition. To define an antitrust market, courts must determine what products consumers will reasonably substitute for each other, and what alternative choices will limit a supplier’s ability to set higher prices or otherwise affect terms of sale. [17] In Brown Shoe, the Court established primary considerations for identifying a relevant product market, including “reasonable interchangeability” and practical indicia. [18]  Luxury plaintiffs typically advocate for narrowly-defined markets (e.g., “Birkins”) to more easily demonstrate market power. [19]  However, courts have historically been wary of single brand product markets, as they often represent a circular argument: if the product market is limited to Birkins, only Hermès would be considered to compete with Hermès, thereby making market power a matter of definition rather than proof. [20] 

There are few instances in which narrow, brand-specific markets may be reasonable to define, but they typically require more than brand loyalty. The Supreme Court’s decision in Eastman Kodak Co. v. Image Technical Services is a well-known example in which the court ruled that aftermarkets—where consumers face significant information or switching costs (i.e., the costs associated with substituting one product for another)— can create the potential for market power. [21] However, Kodak should not be seen as a “blank check” allowing for the definition of any loyal customer base as its own unique market. Kodak relied on the specific nature of consumer lock-in, not the perceived image of the product. [22] Therefore, for a Birkin-related tying claim, the issue is whether “Birkin access” is a distinct "product market” with limited substitutes or merely a way to distribute luxury goods within a larger market that contains multiple competitors of similar high-end handbags. [23] 

These issues surfaced directly in the court’s dismissal order. Judge James Donato determined that the second amended complaint failed to adequately plead a relevant product market, market power in the alleged tying product market, and injury to competition in a tied product market. [24]  One of the order’s quotes encapsulates the fundamental antitrust impulse: “It may be, as plaintiffs suggest, that Hermes reserves the Birkin bag for its highest-paying customers, but that in itself is not an antitrust violation.” [25] The issue with scarcity or selectivity is that such practices may create competitive harm only if they are supported by sufficient market power. [26] Bloomberg Law reported the decision in similar terms, noting the court’s determination that the plaintiffs did not sufficiently allege the necessary facts regarding the existence of market power in a properly identified market in accordance with the requirements of the Sherman Act. [27] 

Another important barrier for plaintiffs is pleading. Because of the standards established by Twombly and Iqbal, plaintiffs now must provide enough factual detail in their pleadings to support a claim that is plausible (and not just speculative). [28] This hurdle can be particularly significant in antitrust cases since defining markets, demonstrating market power, and showing foreclosure all require a substantial amount of evidence that may be available only from the defendants prior to discovery. [29] The district court recognized this when it stated that the second amended complaint represented the plaintiffs’ third attempt to state a plausible Sherman Act claim, supporting dismissal with prejudice. [30] Commentators have also made the same observation: even if we assume that the alleged tie is per se illegal at the motion-to-dismiss stage, the court still demands plausible allegations of a tying market and market power.  [31] 

The competitive harm component presents an additional problem in “luxury access” cases. Antitrust injury requires harm “of the type the antitrust laws were intended to prevent,” rather than merely harm to consumers who spent more than they wanted to spend. [32] In tying, the classical competitive harm theory is foreclosure, where customers are required to buy the tied product from the defendant rather than from the defendant’s competitors, thereby lessening competition in the tied product’s market.[33]  However, the Birkin allegations frequently characterize the “tied products” broadly (i.e., various Hermès products across multiple categories), thereby making it more difficult to determine a specific tied-product market in which the defendant has foreclosed rivals. [34] Without a clear tied-product market and plausible foreclosure claims, the complaint may be characterized as “Hermès sold more Hermès,” which the court may treat as normal brand success and therefore not as an exclusionary competitive act. [35]  In other tying cases, the Ninth Circuit has emphasized that the plaintiff must demonstrate how the challenged arrangement relates to a plausible injury to competition, not only to customers. [36] 

A neutral assessment of Cavalleri should fairly present the strongest arguments on both sides. From the view of the plaintiffs, the alleged conduct is a prime example of classical leverage. In this manner, Hermès allegedly utilized an extraordinary demand for a limited product to compel customers to purchase additional items in order to have access to said limited product. [37] If such conditions are legitimate and, in practice, unavoidable for those consumers desiring to acquire the tying product, the legal doctrines which comprise the body of law known as “tying” were created specifically to scrutinize such forms of coercion. This is especially true when they are used to divert consumer preference from competing sellers in the same or related markets in which the tied goods and services are sold. [38]  Coverage of the case in legal publications has characterized it as a test of the ability of luxury brands to create “relationship retail” in ways that look like conditional dealing. [39] 

From the defendant’s perspective, Hermès’ actions could be viewed as lawful allocation of a limited resource along with curated relationships with their customers. Both of these characteristics are typical of luxury retail. [40] Generally, U.S antitrust laws do not require a company to sell products they cannot meet demand on to every customer who requests them nor is there an obligation to “deal” with other companies under normal circumstances. The Supreme Court has cautioned that extending antitrust liability to cover “everyday” business decisions without evidence of clearly exclusionary conduct resulting in harm to competition would be improper. [41] Therefore, from this perspective, expanding tying doctrine to classify “access” as a separate product would effectively use antitrust law as a mechanism to challenge exclusivity itself, rather than demonstrable competitive harm within a defined market. [42] 

The stakes extend well beyond the Birkin. There are numerous other areas where scarcity-based “access” is a widespread phenomenon (e.g. limited-edition sneakers, members-only releases, and “drop culture” strategies that condition access on prior spending or status). [43]  Thus, if courts require plaintiffs to plead tight market definitions and specific foreclosure mechanisms, a number of access-based antitrust claims will be dismissed without further proceeding. [44] Conversely, if courts permit plaintiffs to plead generally and assume that the fact that an item commands a high price due to its prestige constitutes sufficient evidence of monopoly, then antitrust laws could become a general regulatory tool applicable to all sellers who engage in selective sales and luxury branding practices. [45] Fashion and legal press have reported that the decision is closely followed for its potential impact on the business models of scarcity-driven companies and on the practicality of pursuing antitrust claims against brands in prestige markets. [46] 

Ultimately, Cavalleri illustrates an enduring theme in antitrust law: the central question is not whether a sales practice feels unfair, but whether it restrains trade through market power and produces anticompetitive effects in a properly defined market.[47] This case also suggests that future “luxury access” cases will either thrive or falter based upon their ability to plead a defined and concrete competitive harm, as opposed to the cultural status of the product itself. [48] 

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Sources

1. Hermès wins Birkin antitrust case: Why it matters, Vogue (Oct. 2025), https://www.vogue.com/article/hermes-wins-birkin-antitrust-case-why-it-matters.

2. Cavalleri v. Hermès Int’l, No. 3:24-cv-01707-JD, Second Order re Dismissal (N.D. Cal. Sept. 17, 2025), https://docs.justia.com/cases/federal/district-courts/california/candce/3%3A2024cv01707/426721/61.

3. Ibid.; Hermès Beats Antitrust Suit Alleging Unlawful Birkin Bag Scheme, Bloomberg Law (Sept. 2025), https://news.bloomberglaw.com/litigation/hermes-beats-antitrust-suit-alleging-unlawful-birkin-bag-scheme.

4. Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12–18 (1984).

5. Cavalleri, No. 3:24-cv-01707-JD (N.D. Cal. Sept. 17, 2025).

6. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488 (1977).

7. Ibid.

8. Sherman Act § 1, 15 U.S.C. § 1.

9. Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438, 448–52 (2009), citing Sherman Act § 2, 15 U.S.C. § 2.

10. Clayton Act § 3, 15 U.S.C. § 14.

11. Jefferson Parish, 466 U.S. at 12–18.

12. Illinois Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28, 36–46 (2006).

13. Jefferson Parish, 466 U.S. at 9–18.

14. Illinois Tool Works, 547 U.S. at 43–46.

15. Hermès Beats Antitrust Suit, Bloomberg Law (Sept. 2025).

16. Illinois Tool Works, 547 U.S. at 43–46.

17. Brown Shoe Co. v. United States, 370 U.S. 294, 324–25 (1962).

18. Ibid.

19. Hermes Bags Antitrust Win That Clarifies Luxury Tying Claims, Holland & Knight (Oct. 2025), https://www.hklaw.com/en/insights/publications/2025/10/hermes-bags-antitrust-win-that-clarifies-luxury-tying-claims.

20. Illinois Tool Works, 547 U.S. at 43–46.

21. Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 481–82 (1992).

22. Ibid.

23. Why Hermès’ Victory Matters for Every Scarcity-Driven Brand, The Fashion Law (Oct. 2025), https://www.thefashionlaw.com/why-hermes-antitrust-victory-matters-for-every-scarcity-driven-brand/.

24. Cavalleri, No. 3:24-cv-01707-JD (N.D. Cal. Sept. 17, 2025).

25. Ibid.

26. Brunswick, 429 U.S. at 488.

27. Hermès Beats Antitrust Suit, Bloomberg Law (Sept. 2025).

28. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–57 (2007), discussing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

29. Twombly, 550 U.S. at 555–57.

30. Cavalleri, No. 3:24-cv-01707-JD (N.D. Cal. Sept. 17, 2025).

31. Hermes Wins Dismissal of Tying Claims, Zelle (Oct. 2025), https://www.zellelaw.com/Hermes_Wins_Dismissal_of_Tying_Claims.

32. Brunswick, 429 U.S. at 488.

33. Jefferson Parish, 466 U.S. at 14–16.

34. Cavalleri, No. 3:24-cv-01707-JD (N.D. Cal. Sept. 17, 2025).

35. Brantley v. NBC Universal, Inc., 675 F.3d 1192, 1201–02 (9th Cir. 2012).

36. Ibid.

37. Jefferson Parish, 466 U.S. at 12–18.

38. Ibid.

39. Holland & Knight, Hermes Bags Antitrust Win (Oct. 2025).

40. Cavalleri, No. 3:24-cv-01707-JD (N.D. Cal. Sept. 17, 2025).

41. Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407–10 (2004).

42. The Fashion Law, Why Hermès’ Victory Matters (Oct. 2025).

43. Vogue, Hermès wins Birkin antitrust case (Oct. 2025).

44. Twombly, 550 U.S. at 555–57.

45. Illinois Tool Works, 547 U.S. at 36–46.

46. Bloomberg Law, Hermès Beats Antitrust Suit (Sept. 2025); The Fashion Law, Why Hermès’ Victory Matters (Oct. 2025).

47. Brunswick, 429 U.S. at 488.

48. Cavalleri, No. 3:24-cv-01707-JD (N.D. Cal. Sept. 17, 2025).