CJEU allows ban on online sale via 3rd party platform in selective distribution system

Today the Court of Justice of the European Union (CJEU) has given its highly anticipated ruling in the Coty case. This ruling confirms that resellers of luxury products that are members of a selective distribution system can be prohibited from selling the products through a (recognisable) third party platform. Such is under the condition that the prohibition has the objective of persevering the luxury image of the products, is laid down uniformly, not applied in a discriminatory fashion and is proportionate in the light of the objective pursued.

The CJEU rules that, in the matter at hand, such ban does not constitute a restriction of the customers that the reseller may sell to nor a restriction on passive sales to end users. The CJEU points out that it does not appear possible to circumscribe, within the group of online purchasers, ‘third-party platform customers’. Furthermore, in the matter at hand, the authorized resellers are allowed, under certain conditions, to advertise via the internet on third-party platforms and to use online search engines. As a result, customers are usually able to find the online offer of authorized resellers.

In its ruling, the CJEU has recognised the importance for brands to preserve the luxury image of their goods. As a result luxury brands for which a selective distribution system is set up, may in principle ban their products from being sold on website such as Amazon and eBay.

For the full text of the judgment see the following link.

Author(s)

  • Martine de KoningMartine de Koning