Luxury brand owners may soon be able to prevent the sale of their products online via Amazon and Ebay
On 26 July 2017, in the matter of Coty Germany GmbH v Parfümerie Akzente GmbH, at the European Court of Justice, Advocate General Wahl, stated a supplier of luxury goods may prohibit its authorised retailers from selling its products on third-party platforms such as Amazon or eBay.
Coty Germany is a luxury cosmetic brand, who preserves their image by selling its products through a selective distribution network via their authorised retailers. Parfümerie Akzente (an authorised retailer) began selling the products online via Amazon.
It is established case law that by their very nature, luxury goods may require a selective distribution system to preserve the quality of their goods. Selective distribution networks are compatible with EU competition if they comply with the following criteria:
- the resellers are chosen on an objective criteria of a qualitative nature, determined uniformly for all and applied in a non-discriminatory manner;
- the nature of the product, including the prestige image, requires selective distribution to preserve the quality of the product and to ensure that it is correctly used; and
the criteria established does not go beyond what is necessary.
- The matter before the court with regards Coty, is whether the authorised seller is prohibited from using third party platforms (Amazon and eBay) for internet sales of the goods.
However, we are now eagerly awaiting the court of appeal judgment in this matter.