Luxury goods makers may be able to stop retailers from selling their products on Amazon and other online marketplaces, after European judges said that cosmetics group Coty had not broken EU rules by blocking online sales on certain platforms.
The European Court of Justice decided on Wednesday that US cosmetics and fragrance group Coty – which has a portfolio of brands such as Calvin Klein, Rimmel and Marc Jacobs – did not break competition laws when it prevented Parfümerie Akzente, one of its authorised German distributors, from selling its products on Amazon.de.
The case sets a precedent that could allow other luxury brands to stop their distributors selling their goods on Amazon, eBay and other online marketplaces.
Luxury goods have a special exemption to competition rules allowing high-end brands like Gucci and Dior to limit sales of their product to only those stores that maintain their luxury image.
Online platforms and some antitrust specialists have expressed concern that this case could extend those bans more widely, beyond the very high-end luxury products. That extension could threaten an important distribution channel for many small and medium sized retailers of mid-range branded products.