Reed Smith Client Alerts

In our recent client alert on the European Commission’s e-commerce sector inquiry, we highlighted the potential impact the Coty case may have on the online sale restrictions luxury brand owners are legally allowed to impose upon their distributors. Earlier this week, Advocate General Wahl’s opinion was published, in advance of the final judgment due in the coming months. Brand owners will be pleased to note the Advocate General’s comments regarding the importance of freedom in defining the methods whereby luxury products can be distributed, and that he regards these as factors that can have pro-competitive effects, by stimulating innovation and the quality of services provided to customers.

Authors: Edward S. Miller Michaela Westrup Alexander S. Mackay

Type: Client Alerts

The case concerns an order sought by Coty Germany in a German court against Parfümerie Akzente GmbH, prohibiting Akzente from distributing its luxury cosmetics via a third-party online platform, in accordance with a restriction on the use of third-party sites in the selective distribution agreement between Coty and Akzente.

The German court referred several questions regarding the legality of such a restriction to the European Court. The Coty case follows a previous similar case where the European Court held that Pierre Fabre could not lawfully prevent retailers from selling its products online by insisting that a pharmacist be physically present whenever product was sold.