ECJ judgment on internet sales in a selective distribution system
On 6 December 2017 the European Court of Justice (ECJ) handed down its judgment in the Coty case. The ECJ first reconfirmed that, subject to certain requirements, a selective distribution system aiming at preserving the luxury character of the contract product does not infringe EU competition law. The ECJ then went on to find that a requirement in a selective distribution system, whereby the selective distributor is prohibited from conducting internet sales over a third party platform discernible to consumers, does not infringe competition law. The supplier may thus require that a distributor’s online sales take place under the distributor’s brand and without the visible involvement of third parties.
The judgment is of considerable interest. The European Commission has in principle accepted restrictions on internet sales over third party platforms as lawful under EU competition law; on the contrary, several Member State authorities have taken a negative stance to such restrictions. It remains to be seen what impact the judgment will have, in particular at the national level.