Luxury brands can now block sales on Amazon & eBay
Luxury brands can now block sales on Amazon & eBay
Luxury goods makers can block online sales, Europe's top court rules
07 December, 2017, 17:16
In a case led by USA cosmetics brand Coty, which argued that German retailer Parfümerie Akzente sold its goods on sites against Coty's wishes, the European Court of Justice said online marketplaces detracted from the image of luxury brands.
Luxury beauty company Coty can stop retailers from selling its products online, Europe's top court has ruled.
It said: "A supplier of luxury goods can prohibit its authorised distributors from selling those goods on a third-party internet platform such as Amazon".
The European Court of Justice has now agreed that suppliers can prohibit the sale of their goods on online platforms to safeguard their image. Luxury owners have long waged a battle against what they see as free riders cashing in on their exclusivity and branding.
In this context the CJEU was asked whether selective distribution systems relating to luxury products, and designed mainly to preserve the "luxury image" of those products, are compatible with the cartel prohibition of Article 101 (1) TFEU.
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However, opponents have warned that this decision would hurt small dealers and their business.
But the European court said that for luxury goods firms, such rules can be critical to protecting the value of the products.
"Our preliminary view is that such manufacturers have not received carte blanche to impose blanket bans on selling via platforms", he said.
Germany's antitrust agency said it was examining the European Union court ruling, but expected it to have only a limited effect on its own decisions.
The decision out of Luxembourg comes in response to contractual proceedings that the luxury retailer Coty Prestige initiated in Germany against one of its authorized retailers.
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