Luxury Brands Win a Crucial Victory in Battle Against Amazon Distribution

CJEU rules that brand owners can restrict online sales to protect image

Luxury Brands Win a Crucial Victory in Battle Against Amazon Distribution

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.

In a move that could have far-reaching consequences, the Court of Justice backed the case brought by U.S. cosmetics giant Coty - which makes Rimmel and CoverGirl brands, among others.

Many luxury brands have taken a dim view of Amazon for a long time-they want to be able to maintain their luxury image by only selling their products through high-end channels, and Amazon isn't that.

This new ruling should help to preserve the product value chain offer now that unauthorised distribution of luxury beauty products has been legally defined by the European Court of Justice.

The issue is significant in Europe, whose companies account for 70 percent of global luxury goods sales.

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Europe's top court has ruled that luxury brands can stop distributors selling their products online on websites such as Amazon and eBay.

Online platforms such as Amazon and eBay in turn say online sales curbs are anti-competitive and hurt small businesses.

Parfumerie Akzente said it meets the terms for online sales set by luxury owners. In their ruling, judges confirmed that luxury brands could restrict sales through online marketplaces without breaching European competition rules.

Germany's antitrust agency said it was examining the European Union court ruling, but expected it to have only a limited effect on its own decisions.

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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