European Court confirms certain restrictions on resale of luxury brands are justifiable

01 Aug 2018

Luxury brand owners are able to restrict their authorised retailers from selling their products on third party platforms, such as Amazon or eBay in order to protect the reputation of their goods. This was recently confirmed in a highly anticipated ruling by the Court of Justice of the European Union (CJEU) in the case of Coty Germany GmbH v Parfümerie Akzente GmbH.

Akzente had a distribution agreement with Coty, a German company which supplies luxury high-end cosmetics. Keen to preserve its luxury reputation, Coty imposed various contractual restrictions on the resale of its products; for example, all points of sale had to be approved by Coty. However in March 2012 Coty changed its selective distribution agreements to confirm that whilst Akzente was permitted to sell products online, they could only do so by agreed “electronic shopfronts”, and not via third party platforms such as Amazon or eBay.  Akzente refused to fall into line and a dispute arose over Akzente’s desire to sell Coty’s products on  

The case primarily turned upon whether a selective distribution system, such as that which Coty sought to impose, was contrary to Article 101 of the Treaty on the Functioning of the European Union, which prohibits as incompatible with the internal market any agreements which restrict or distort competition within the internal market. Initially the German court found that Coty’s selective distribution was contrary to Article 101; on appeal, however, the question was referred to the CJEU.

The CJEU confirmed that it is not contrary to Article 101 for luxury brand owners to restrict online sales via third-party platforms, providing that the restriction is laid down uniformly and not applied in a discriminatory manner. In addition, the objective of any restriction must be the preservation of the luxury image of the goods, and it must be proportionate to that objective.

Welcome news for luxury brand owners who wish to ensure that their goods are only sold via approved online platforms, but any brand owner attempting to restrict online re-sales must be careful not to offend EU competition laws. Legal advice should always be sought before imposing any resale restrictions.

Further reading

Use of statutory demand to make company insolvent suspended until June

Blog, Legal Updates
Cheraine Williams looks at more temporary Covid-driven measures that will protect businesses and tenants from possible legal action
Read more Read

New guidance issued for valuation of flats and investigating fire safety

Blog, Legal Updates
Cheraine Williams looks a the current situation facing leaseholders looking to sell or re-finance their property; will new guidance provide clarity?
Read more Read

Government sets new energy targets for domestic and commercial buildings

Blog, Legal Updates
UK law requires net zero greenhouse gas emissions by 2050; new rules and standards for heating and powering buildings will have a significant impact
Read more Read

Covid regs prevent landlords taking action to recover rent for more than 500 days

Blog, Legal Updates
Just seven days’ rent arrears used to be enough for commercial landlords to take action; the latest adjustment pushes that out to 554 days
Read more Read
  • Brighton Office

    1 Jubilee Street


    East Sussex

    BN1 1GE

  • Gatwick Office

    Griffin House

    135 High Street


    West Sussex

    RH10 1DQ

  • Guildford Office

    Wonersh House

    The Guildway

    Old Portsmouth Road



    GU3 1LR

  • Horsham Office

    Ridgeland House

    15 Carfax


    West Sussex

    RH12 1DY

  • London Office

    6 New Street Square

    New Fetter Lane


    EC4A 3BF

  • Get in touch