Purveyors and manufacturers of luxury goods trying to ‘protect’ their products from resale via online platforms such as Amazon and eBay can take heart from a recent ruling.
The case concerned global beauty company Coty’s German subsidiary, Coty Germany, and the German retailer Parfümerie Akzente, which had been selling Coty’s goods via Amazon against Coty’s wishes.
The case was referred to the Court of Justice of the European Union (CJEU) to assess whether banning online sales through third-party sites restricted competition. The court held that as the agreement between the firms related entirely to luxury goods, Coty was entitled to restrain Parfümerie Akzente from selling its products via Amazon, as this would be detrimental to the luxury image such selective distribution networks sought to create and protect. However, it ruled that the prohibition must be applied in a uniform and non-discriminatory manner that is proportionate to the objective and not go beyond what is necessary.
Luxury-brand owners have long fought to protect what they see as their exclusivity and branding. In recent years this has meant trying to stop retailers selling their products via online platforms such as Amazon and eBay. This latest judgment suggests that the courts will not view such bans as anti-competitive where they involve luxury goods within selective distribution networks.
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