Luxury brands may block sales on online market places like Amazon & eBay

In a case led by Coty, US cosmetics brand which argued that German retailer Parfümerie Akzente sold its goods on sites against Coty’s wishes. According to the European Court of Justice online market places detracted from the image of luxury brands.

The ruling said that Luxury brands have no contractual relationship with the online market places. According to which in turn are not required to comply with the brands’ quality criteria.

The criteria are imposed on all of its authorised distributors. It is under the terms of their selective distributive agreements.

According to the legal experts online market places have to direct contractual relationships with luxury brands in order to be able to continue to offer them on their platforms.

In the mean time, luxury department store retailers such as Harrods, Selfridges, Harvey Nichols and Liberty – as well as luxury brands that have direct-to-consumer sales points – observe a boost in sales as the online market place customers would need to revert to these as authorised product distributors.