Coty Case: Some Restrictions On Internet Selling Are Allowed

Co-authored by Chris Eykel

The Court of Justice of the EU (CJEU) has ruled in Coty v Parfümerie Akzente (C-230/16) that suppliers of luxury goods can restrict authorised distributors in their selective distribution system for luxury goods from selling those goods through unauthorised third party online platforms such as Amazon and eBay, if:

• distributors are chosen on the basis of objective criteria of a qualitative nature;
• the criteria are applied uniformly and in a non-discriminatory fashion;
• the criteria do not go beyond what is necessary; and
• the restriction is proportionate in the light of preserving the luxury image of the goods.

Background

Coty Germany is a luxury cosmetics supplier (its brands include Marc Jacobs, Calvin Klein and Chloe). In order to preserve its luxury image, Coty distributes certain brands through a selective distribution network i.e. it sells products to distributors that are chosen based on specific criteria such as