Luxury brands can now ban retailers from selling their goods on online marketplaces such as Amazon and eBay, Europe’s top court has ruled.
The European Court of Justice decided on Wednesday that a ban was “appropriate to preserve the luxury image” of products.
The case was bought by cosmetics group Coty, which owns brands such as Marc Jacobs and Calvin Klein, but it is expected to set a precedent that could allow other luxury brands to stop their distributors selling their goods on Amazon, eBay and other online marketplaces.
The court ruled that Coty did not break competitions laws when it prevented Parfümerie Akzente, one of its authorised German distributors, from selling its products on Amazon.de.
Welcoming the decision, Coty said: “After years of uncertainty, this means luxury brands can determine how they are placed on digital platforms and it is a clear ruling for the protection of luxury brands’ image, the defence of our teams’ work and the protection of consumers’ rights and information.”
Luxury retailers such as Harrods and Selfridges could benefit from the ban as online marketplace customers would need to revert to these as authorised product distributors, but online platforms argue that the decision could hurt small businesses.