The European Court of Justice has ruled that 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 found that such a prohibition was appropriate and did not, in principle, go beyond what is necessary to preserve the luxury image of the goods.
The case in question relates to Coty Germany which sells luxury cosmetic goods in the country’s domestic market.
In order to preserve the Coty luxury image, it markets certain of its brands via a selective distribution network, that is to say, through authorised distributors.
The sales locations of those authorised distributors must comply with a number of requirements relating to their environment, décor and furnishing.
Rules of engagement
Furthermore, authorised distributors are allowed to sell the goods in question online, provided that they use their own electronic shop window or non-authorised third-party platforms, on condition that the use of such platforms is not discernible to the consumer.
By contrast, they are expressly prohibited from selling the goods online via third-party platforms which operate in a discernible manner towards consumers.
Coty Germany brought proceedings before the German courts against one of its authorised distributors, Parfümerie Akzente, with a view to prohibiting it from distributing Coty goods via amazon.de.
The Court noted 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.
That aura is an essential aspect of those goods in that it thus enables consumers to distinguish them from other similar goods. Therefore, any impairment to that aura of luxury is likely to affect the actual quality of those goods.