US beauty group Coty wins online sales ban case

US beauty group Coty has won a case regarding an online sales ban of its products on third-party platforms.

The case questioned whether Coty prohibiting its authorised distributor Parfümerie Akzente from selling Coty goods via platforms such as amazon.de was lawful under EU competition law.

The European Court of Justice (ECJ) said: “A supplier of luxury goods can prohibit its authorised distributors from selling those goods on a third-party internet platform such as Amazon.”

“Such a prohibition is appropriate and does not, in principle, go beyond what is necessary to preserve the luxury image of the goods.”

This ruling also applies to other makers of luxury brands across the EU.

The ECJ further stated: “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.”

Coty owns more than 77 brands, including Chloé, Covergirl, Rimmel, and Calvin Klein.