Beauty giant Coty wins landmark ECJ ruling against online sellers

Beauty giant Coty has won a landmark ruling in the European Court of Justice, allowing it to place a ban on its products being resold on online marketplaces such as Amazon.

The company makes fragrances and make-up for some of the world's biggest brands including Calvin Klein, Rimmel London, Playboy and Max Factor.

The case was brought to the ECJ due to a dispute between Coty and one of its licenced distributors, a perfumer retailer in Germany called Parfumerie Akzente.

The court ruled that the "selective distribution systems" used by luxury brands to limit where their products are available can be seen as an aspect of competition. Limiting distribution helps to maintain "the prestige image", according to the ruling.

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The court also decided that this was more important than making a wider range of prices available to more consumers, as long as the product in question was a luxury item which might need the competitive edge of exclusivity. The ruling stated: "a reduction of intra-brand competition might be accepted when it is essential to the stimulation of inter-brand competition."

Coty will now be able to write a ban on sales through third party online platforms into its distributors' contracts.

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