Luxembourg
31 July 2017
Reporter: Barney Dixon

Third-party online sales ban doesn’t harm competition


Banning third-party sales of branded goods does not infringe competition rules, according to a Court of Justice of the EU (CJEU) advocate general.

In his 26 July opinion on a request for a preliminary ruling in Coty Germany v Parfümerie Akzente, advocate general Nils Wahl said that brand restrictions on the use of third-party platforms for online sales does not breach EU competition rules.

Wahl said this interpretation of EU competition law is subject to certain conditions. Any restriction must be justified by the nature of the products concerned and applied in a non-discriminatory manner.

He said: “By expanding on the considerations hitherto applied in relation to selective distribution, that prohibition is likely to improve the luxury image of the products concerned in various respects.

“Not only does it ensure that those products are sold in an environment that meets the qualitative requirements imposed by the head of the distribution network, but it also makes it possible to guard against the phenomena of parasitism, by ensuring that the investments and efforts made by the supplier and by other authorised distributors to improve the quality and image of the products concerned do not benefit other undertakings.”

The case centred on Coty, a luxury cosmetics supplier in Germany that selectively distributes its products to protect the luxury image of its brands.

Coty sellers must meet certain requirements to become authorised by the brand, including a certain environment, decor and furnishing.

Parfümerie Akzente began selling its products through Amazon, which Coty challenged, seeking an injunction. The Higher Regional Court in Frankfurt referred the case to the CJEU to ascertain whether a ban on sales would be anti-competitive.

Wahl’s opinion is not binding on the CJEU, whose preliminary ruling has not yet been issued.

More news
The latest news from IPPro The Internet
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Countries should break IP rules to ensure growth, says report
23 February 2018 | London | Reporter: Barney Dixon
Countries such as India and China should break harmonised intellectual property rules to avoid protectionist measures from the US and EU, according to a new report from Gowling WLG
Man sentenced for fake airbag sale
23 February 2018 | London | Reporter: Barney Dixon
A man has been sentenced to 10 months in prison, suspended for 12 months, for selling counterfeit airbags
EU Copyright Directive “compromise amendments” revealed
22 February 2018 | Brussels | Reporter: Barney Dixon
EU rapporteur Axel Voss has proposed “compromise amendments” to article 13 of the EU's Copyright Directive, which would further shift the burden of responsibility for copyright infringement to internet platforms
INTA marks key 2017 achievements in annual report
21 February 2018 | New York | Reporter: Barney Dixon
INTA has highlighted its key achievements in 2017, including ever-increasing membership and a “record-breaking” annual meeting, in its 2017 annual report
UK launches trade secrets consultation
20 February 2018 | London | Reporter: Barney Dixon
The UK IPO has launched a technical consultation on the EU trade secrets directive and its implementation into UK law
BakerHostetler hires IP partner
19 February 2018 | Los Angeles | Reporter: Barney Dixon
BakerHostetler has hired Troy Schmelzer as partner in its intellectual property group
ICANN rejects .corp, .home and .mail
19 February 2018 | California | Reporter: Barney Dixon
ICANN has halted the new gTLD applications for .corp, .home and .mail and agreed to refund applicants the full fee of $185,000