Luxury brands can now block retailers from selling their products on online marketplaces such as Amazon and Ebay after a landmark ruling in a top European court yesterday.
In a case led by US cosmetics brand Coty, which argued that German retailer Parfümerie Akzente sold its goods on sites against Coty’s wishes, the European Court of Justice said online marketplaces detracted from the image of luxury brands.
The ruling said luxury brands have no contractual relationship with online marketplaces, which in turn are not required to comply with brands’ quality criteria.
This criteria is imposed on all its authorised distributors, under the terms of their selective distribution agreements.
Legal experts have said online marketplaces will now have to have direct contractual relationships with luxury brands in order to be able to continue to offer them on their platforms.
In the meantime, luxury department store retailers such as Harrods, Selfridges, Harvey Nichols and Liberty – as well as luxury brands that have direct-to-consumer sales points – could see a boost in sales as online marketplace customers would need to revert to these as authorised product distributors.