Saturday, 20 October, 2018

Luxury Brands Win a Crucial Victory in Battle Against Amazon Distribution

Melinda Barton | 07 December, 2017, 16:04

The Court of Justice of the EU (ECJ) ruling came in a case involving US cosmetics maker Coty's German subsidiary and German retailer Parfumerie Akzente, which sells Coty's goods on sites including Amazon against the company's wishes.

It remains to be seen how that will now change considering the fact that the European Court of Justice's ruling only applies to luxury brands.

Coty, owner of brands such as Marc Jacobs and Calvin Klein raise a case on this issue.

European competition law can not stop a luxury retailer that does not want its wares being trafficked via the online retail giant Amazon, the EU's highest court ruled Wednesday.

Luxury goods brands may block distributors from selling their products on e-commerce sites such as Amazon and eBay following a ruling by the European Court of Justice.

Luxury beauty company Coty can stop retailers from selling its products online, Europe's top court has ruled.

Brand owners have previously argued that they should have the right to choose their distributors to protect their image and exclusivity.

However, opponents have warned that this decision would hurt small dealers and their business.

It is no secret that some luxury brands are not too keen on online sales. Therefore, luxury goods manufacturers will be able to prevent their products from being sold on third party websites by distributors. In two test cases in recent years, the German cartel office forced Adidas and Asics to drop such bans, saying online platforms are crucial for small- and medium-sized companies and consumers.

Needless to say, this ruling has significant and broader competitive ramifications for the DF&TR industry.

"Our preliminary view is that such manufacturers have not received carte blanche to impose blanket bans on selling via platforms", he said.