German beauty products maker Coty denied that its distribution policies indicate an overall ban on online sales during a landmark case in Europe that could determine whether luxury goods companies can stop retailers from selling their products through online marketplaces.
According to Reuters, U.S.-based Coty is locked in a dispute with German retailer Parfumerie Akzente, which sells the company’s goods on sites including Amazon against Coty’s wishes. The company insists that its agreements preventing retailers from selling on third-party online platforms are not about imposing a ban, but simply about protecting the image and quality of its products. This issue is of significance in Europe, which comprises 70 percent of global luxury sales.
“In Germany, we have a saying a picture is worth a thousand words; in this case, a name is worth a thousand words,” Coty’s lawyer, Andreas Lubberger, told the Court of Justice of the European Union (ECJ).
But online platforms say these types of agreements are anti-competitive and hurt small businesses.
“If you are talking about a well-known marketplace which sells products to consumers, then you need proper considerations to ban it,” Parfumerie Akzente’s lawyer Oliver Spieker told judges. “Amazon and eBay already sell well-known brands — do these brands have more to lose than Coty?”
While the German government added that online platforms were key outlets for small and medium-sized businesses, France — home to luxury brands such as Louis Vuitton, Chanel and Christian Dior — came to Coty’s defense, saying a restriction on online sales protects the prestige of these products.
An ECJ court adviser will issue a non-binding opinion in the coming months.
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