Luxury goods-makers win fight to block retailers from selling on Amazon

Luxury goods-makers win fight to block retailers from selling on Amazon

As long as luxury goods brands apply any ban on specific retail platforms uniformly in a contractual clause across its authorised distributors, the court finds such a clause is reasonable.

"A supplier of luxury goods can prohibit its authorised distributors from selling those goods on a third-party internet platform such as Amazon", the ECJ said.

Coty allows its products to be sold by authorized dealers but puts a number of restrictions on how such sales are carried out, finding such terms necessary to preserve its branding image.

The European Union's highest court ruled Wednesday that luxury goods makers like beauty giant Coty could in theory block their authorized distributors from selling high-end goods on sites like Amazon.com's marketplace without violating antitrust law.

The EU's top court was dealing with a case brought about by luxury cosmetics brand Coty in Germany.

Online platforms argue that such curbs are anti-competitive and will hurt small businesses.

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It is no secret that some luxury brands are not too keen on online sales.

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.

The German cartel office said it expected the court's ruling to have a limited effect on its policy, noting that its decisions had involved brand manufacturers from outside the luxury industries.

"Our preliminary view is that such manufacturers have not received carte blanche to impose blanket bans on selling via platforms", he said. However the judgment may have implications for selective distribution systems for other types of goods, where selective distribution is justified under the competition rules because the nature of the goods requires the use of such a system.

The case is C-230/15 Coty Germany.

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