Coty wins ECJ approval for online sales ban in landmark luxury sales case

Coty wins ECJ approval for online sales ban in landmark luxury sales case

A European Court of Justice (ECJ) ruling approving luxury beauty company Coty’s refusal to allow authorized German distributor Parfümerie Akzente to sell its goods on is said to have set a precedent for the sale of luxury beauty goods online.

The ECJ ruled in favour of Coty, stating that the company was not in violation of competition laws by refusing to allow Parfümerie Akzente to sell its products on the Deutch arm of e-tail giant Amazon, with the European court backing its right to protect its image.

The outcome of the ongoing court case regarding the sale of luxury beauty products sold on sites such as eBay and Amazon will set a standard for companies being able to monitor and prohibit the sale of their prestige goods online. However, e-tailers such as Amazon and eBay have countered that the ruling to curb online sales will be harmful to small businesses while being anti-competitive.

Speaking during the ruling, the ECJ said, “A supplier of luxury goods can prohibit its authorized 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.”

Indeed, the news was welcomed by Coty, which said, “After years of uncertainty, this means luxury brands can determine how they are placed on digital platforms and it is a clear ruling for the protection of luxury brands’ image, the defense of our teams’ work and the protection of consumers’ rights and information,”

However, Parfümerie Akzente angled that the decision was to its own benefit too, with Kai Renchen, Chief Executive, stating, “Authorized 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.”