European Union lets luxury brands block goods from Amazon

Luxury Brands Win a Crucial Victory in Battle Against Amazon Distribution

The Court of Justice of the EU (ECJ) ruling came in a case involving USA cosmetics maker Coty's German subsidiary and German retailer Parfumerie Akzente, which sells Coty's goods on sites including Amazon against the company's wishes.

It comes as a decision from the Court of Justice of the European Union, which considered a case brought by Coty Germany relating to the retail of its luxury cosmetics goods in Germany. Coty tells its distributors that they can only sell its makeup through their own "electronic shop windows", and can only use a third-party platform if the consumers can't tell that this is happening.

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 European Court of Justice has now agreed that suppliers can prohibit the sale of their goods on online platforms to safeguard their image.

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

However, e-tailers such as Amazon and eBay have countered that the ruling to curb online sales will be harmful to small businesses while being anti-competitive.

In a move that could have far-reaching consequences, the Court of Justice backed the case brought by United States cosmetics giant Coty - which makes Rimmel and CoverGirl brands, among others.

It is no secret that some luxury brands are not too keen on online sales.

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

Germany will now have to fall in line though, said a competition lawyer, who declined to be named.

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