The European Court of Justice, the court of last resort in the EU, has ruled that luxury good makers may ban the sale of their products on eCommerce platforms like Amazon to maintain the exclusivity of their brands.
The ruling comes after German luxury cosmetics group Coty — the parent behind brands like Calvin Klein and Marc Jacobs, among others — sued to keep its goods from being listed on non-authorized digital sale platforms, according to Wednesday U.S. News reports.
The court found Coty’s desire to limit the distribution of its products to be “appropriate to preserve the luxury image of those goods,” and that it further “does not appear to go beyond what is necessary.”
The case came up as Coty sought to bar an authorized distributor of its products from selling the goods on Amazon.de in a case pending at a Frankfurt, Germany, court. That court, in turn, sought a ruling from EU judges.
The Computer and Communications Industry Association spoke against the ruling, noting it would be “bad news for consumers who will face fewer choices and also less competition when they want to shop online.”
Germany’s antitrust agency said it was examining the EU court ruling, but did not expect it would have a massive effect on rulings it would hand down. This is because the scope of the ruling is very narrow, as the EU’s top court “apparently made a great effort to limit its statements to the realm of real prestige products, where the luxurious aura is a significant part of the product itself,” said Andreas Mundt, head of the Federal Cartel Office.
Brands that are not defined as “luxury” — though still protected by things like trademarks and IP laws — “still have no carte blanche to sweepingly limit their distributors’ use of sales platforms, according to our assessment,” Mundt added.