Coty launches court bid to monitor online sales of luxury goods

Coty launches court bid to monitor online sales of luxury goods

Coty has launched a court case in Frankfurt in a case that, if won, could allow luxury brand owners to decide which outlets can sell their products online.

The case comes as brand owners continue to seek legislation that allows them to determine who sells their products, in a move said to protect the exclusivity of luxury brands such as Calvin Klein and Chloe.

Following the submission of the case, the Frankfurt court has sought guidance from the European Court of Justice (ECJ), with many online retailers saying the possible outcome could harm small to medium businesses.

The dispute was focused on German retailer Parfumerie Akzente, which sells Coty products on an Amazon marketplace against the company’s wishes. Coty has stated the challenge is about ‘preserving the image and quality of its products’ as opposed to imposing a ban on the trade.

Coty’s lawyer Andreas Lubberger told the court, “In Germany, we have a saying a picture is worth a thousand words, in this case a name is worth a thousand words.”

However, Parfumerie Akzente’s lawyer Oliver Spieker challenged this, telling the judges, “If you are talking about a well-known marketplace which sells products to consumers, then you need proper considerations to ban it.
“Amazon and eBay already sell well-known brands, do these brands have more to lose than Coty? L’Oréal for example has a platform on Amazon.”

The case has come under stronger scrutiny due to the European Commission pushing for more cross-border online sales to boost growth and jobs and catch up with the US and Asia, according to the BBC. Indeed, the outcome will have a strong significance for luxury goods on marketplaces such as Amazon, with luxury brands also looking to control counterfeit goods online.