Europe's top court says Coty can impose online sales ban (AMZN, EBAY)


In the meantime, luxury department store retailers such as Harrods, Selfridges, Harvey Nichols and Liberty - as well as luxury brands that have direct-to-consumer sales points - could see a boost in sales as online marketplace customers would need to revert to these as authorised product distributors.

Online platforms such as Amazon and eBay in turn say online sales curbs are anti-competitive and hurt small businesses.

The decision stemmed from a case brought by Coty's German unit against one of its retailers, Parfumerie Akzente, which used Amazon to sell Coty products.

The court said Coty's effort to limit distributors "is appropriate to preserve the luxury image of those goods", adding that it "does not appear to go beyond what is necessary".

The issue is significant in Europe, whose companies account for 70% of global luxury good sales.

In a boost to some of the world's most famous luxury labels, the European Court of Justice ruled that manufacturers had the right to protect their image by restricting sales of their products through websites such as Amazon and Ebay.

The case was bought by beauty giant Coty, which owns brands such as Marc Jacobs and Calvin Klein, but is expected to set a precedent. But luxury fashion brands are seem to be unhappy with its distributors selling the brand items online without the permission.

The court statement on its findings explains that it considers the retail platform of luxury goods as having an impact on the public perception of brands.

"Our preliminary view is that such manufacturers have not received carte blanche to impose blanket bans on selling via platforms", he said.

"This judgment sets the principles for the European Union as a whole".