Luxury good-makers register win over online sales bans

Published: Wilson Clark

On: Dec 2017

A few days ago, the top court of Europe has ruled that luxury brands can immediately stop distributors selling their products through online source on the most trending shopping websites like eBay and Amazon. The European Court of Justice said in statement that a ban was appropriate in order to preserve the luxury image of products.

It is also said that, this would not break any competition rules by minimizing consumer choice. The case was bought into the limelight by the beauty giant Coty which is owner of brands such as Calvin Klein, & Marc Jacobs. But it’s likely to be expected to set a precedent.

On the other hand, the opponents have warned that restricting sales would affect small scale business.  But the European court told that for the makers of the luxury goods, such rules can be very much difficult while protecting the value of the products.

Good-makers win fight against online sales ban

The court found that “The luxury goods quality is the result of their material characteristics, and also the prestigious image that bestows on them as an aura of luxury.” The decision stemmed from a case unveiled by German unit of Coty against one of it’s retailers Parfumerie Akzente which used Amazon platform to sell the products of Coty. However, Coty welcomed the decision, which said that it resolved their years of uncertainty.

Coty said that, “it’s a clear ruling for the protection of images of luxury brands, the defence of our team work as well as the protection of consumers’ information and rights.”

Some fashion companies and other organizations have long clashed with Amazon, which doesn’t do enough to police counterfeit goods. Earlier decisions made by German regulators have observed against big bands including Adidas and Asics in similar fights over online sales ban.

Those decisions recorded that restrictions of sales on online shopping web portals such as eBay and Amazon aimed to control the prices of products. They also told that limiting the use of such websites would ultimately hand over sales to the manufacturers and some large firms, hurting smaller retailers.

Andrea Mundt, the president of the German cartel office, suggested the ruling's main focus on luxury goods which means it would have a limited impact.