Luxury companies can ban Amazon sales

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Coty's case was unsuccessful initially - the trial court found that the contract terms conflicted with German or EU competition law - but the Higher Regional Court in Frankfurt sought guidance on appeal from the European Court of Justice.

"Authorised merchants such as us may sell brand-name products on outward-visible third-party platforms, provided that we meet the conditions that are necessary and reasonable for preserving the luxury image", Chief Executive Kai Renchen said in a statement.

Manufacturers of goods that aren't luxury brands "still have no carte blanche to sweepingly limit their distributors' use of sales platforms, according to our assessment", Mundt added.

In order to preserve the "luxury image" of its products, Coty markets certain of its brands via a selective distribution network, that is to say, through authorised distributors.

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Luxury owners have long waged a battle against what they say are free riders cashing in on their exclusivity and branding.

The case involved Coty's German subsidiary and German retailer Parfumerie Akzente, which sells Coty's goods on sites including Amazon against the company's wishes.

Online platforms argue that such curbs are anti-competitive and will hurt small businesses.

European competition law can not stop a luxury retailer that does not want its wares being trafficked via the online retail giant Amazon, the EU's highest court ruled Wednesday. In their ruling, judges confirmed that luxury brands could restrict sales through online marketplaces without breaching European competition rules. The CJEU's decision in the Coty Germany reference proceedings broadly follows the opinion of Advocate General Wahl which was handed down earlier this year (see here, and further background here).

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