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CJEU: Supplier of luxury goods may prohibit its authorised retailers from selling its products on third-party platforms

According to Advocate General Wahl, a supplier of luxury goods may prohibit its authorised retailers from selling its products on third-party platforms such as Amazon or eBay.

Such a prohibition, which seeks to preserve the luxury image of the products concerned, is not, under certain conditions, caught by the prohibition of agreements, as it is likely to improve competition based on qualitative criteria.

Coty Germany is one of Germany’s leading suppliers of luxury cosmetics. In order to preserve the luxury image of some of its brands, it markets them through a selective distribution network, namely authorised retailers. The shops of those retailers must meet a number of requirements in terms of environment, décor and furnishing. Authorised retailers are also entitled to offer and sell the contract goods on the internet. In that regard, the distribution contracts state, following a reorganisation in 2012, that the authorisation is valid provided that this sales activity is conducted through an ‘electronic shop window’ of the authorised shop and that the luxury character of the goods is preserved. Furthermore, it is stated that it is forbidden for the authorised retailer to make discernible use of unauthorised third parties for internet sales of the contract goods. 

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