Luxury companies can ban Amazon sales

Luxury companies can ban Amazon sales

Luxury companies can ban Amazon sales

And today the European Union 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".

"The court notes in this context that the quality of luxury goods is not simply the result of their material characteristics, but also of the allure and prestigious image which bestows on them an aura of luxury", it says.

The case was bought by cosmetics group Coty, which owns brands such as Marc Jacobs and Calvin Klein, but it is expected to set a precedent that could allow other luxury brands to stop their distributors selling their goods on Amazon, eBay and other online marketplaces.

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"Authorised merchants such as us may sell brand-name products on outward-visible third-party platforms, provided that we meet the conditions that are necessary and reasonable for preserving the luxury image", Chief Executive Kai Renchen said in a statement.

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

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The ECJ has delivered this important ruling in a case brought by Coty Germany GmbH versus Parfümerie Akzente GmbH, after the beauty company sought to have the unauthorised online distribution of its products banned.

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.

The decision out of Luxembourg comes in response to contractual proceedings that the luxury retailer Coty Prestige initiated in Germany against one of its authorized retailers.

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