In December 2017, the CJEU ruled that a supplier of luxury goods can prevent its authorised distributors - part of the supplier's selective distribution system - from selling those luxury goods via third-party platforms (the case concerned 'amazon. de').
In a judgment that will please luxury brand owners, the CJEU confirmed that properly constituted selective distribution schemes can be used to preserve the luxury image of luxury goods.The Court observed that an obligation imposed on authorised distributors to sell the luxury goods online solely through their own online shops and not via third-party platforms, provides the luxury brand owner with a guarantee that its
luxury goods will be exclusively associated with the authorised distributors. It went on to say that such an association is one of the objectives behind a luxury brand owner setting up a selective distribution scheme for its products.
Whilst the position in respect of luxury goods has now been clarified, this does not mean that all brand owners can restrict sales of their products via third-party platforms.The German Competition Authority, for example, has consistently held that restrictions on internet sales via third-party platforms are not justified for mainstream, non-luxury brands.
The Coty judgment is unlikely to be the final word on this issue. Numerous questions still remain unanswered including: how will brand owners respond when operators of third-party platforms modify their websites to include a "luxury" section and voluntarily offer to adhere to brand owners' guidelines for the presentation of their goods? And what view will the CJEU take when it is asked to explain why "high-quality goods" should not be treated in the same way as "luxury goods"?
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