Yahoo Finance Luxury goods makers can block online sales, Europe's top court rules
Makers of luxury goods can block retailers from selling them online, Europe’s top court has ruled.
In a move that could have far-reaching consequences, the Court of Justice backed the case brought by US cosmetics giant Coty – which makes Rimmel and CoverGirl brands, among others.
Coty argued that online platforms selling its high-end products damaged the image of its luxury brands.
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And today the EU court ruled: “A supplier of luxury goods can prohibit its authorised distributors from selling those goods on a third-party internet platform such as Amazon.
“Such a prohibition is appropriate and does not, in principle, go beyond what is necessary to preserve the luxury image of the goods.”
The case involved Coty’s German subsidiary and German retailer Parfumerie Akzente, which sells Coty’s goods on sites including Amazon against the company’s wishes.
Luxury owners have long waged a battle against what they say are free riders cashing in on their exclusivity and branding.
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Online platforms such as Amazon and eBay in turn say online sales curbs are anti-competitive and hurt small businesses.
The issue is significant in Europe, whose companies account for 70% of global luxury good sales.
In two test cases in recent years, the German cartel office forced adidas and Asics to drop such bans, saying online platforms were crucial for small- and medium-sized companies and consumers.
