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Digital Business Lawyer

Final decision in Coty upholds ban on distributors selling on third party platforms

The European Court of Justice (‘ECJ’) handed down its long awaited judgment in the Coty case1 on 6 December 2017. The case raised the question of whether it is permissible under competition law for a supplier of luxury goods, which operates a selective distribution system, to prohibit its authorised distributors from selling on third party online platforms, such as Amazon and eBay. National courts and national competition authorities have adopted conflicting positions on prohibitions of this kind and it was hoped that the judgment would provide clarity in this area to allow a consistent approach in future cases. In July, Advocate General Wahl issued his Opinion, setting out his view that such a prohibition is permissible and does not, in principle, go beyond what is necessary to preserve the luxury image of the goods. The ECJ’s judgment confirms that it agrees with Wahl’s Opinion and will be welcomed by suppliers of luxury goods. The judgment also provides more general support for a permissive approach under competition law for selective distribution systems, as Paul Stone, Partner at Charles Russell Speechlys, explains.

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