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Coty 'Amazon win' sets precedent for luxury online

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This case concerned a selective sales network operated by Coty one of the world’s leading beauty companies with brands including Marc Jacobs

Coty's German unit filed the case against one of its retailers, Parfumerie Akzente, which used Amazon to sell Coty products.

The EU court said Coty's effort to limit distributors "is appropriate to preserve the luxury image of those goods", adding that "it does not appear to go beyond what is necessary".

Many luxury brands have taken a dim view of Amazon for a long time-they want to be able to maintain their luxury image by only selling their products through high-end channels, and Amazon isn't that.

In order to preserve the "luxury image" of its products, Coty markets certain of its brands via a selective distribution network, that is to say, through authorised distributors.

"The prohibition at issue in the main proceedings enables the supplier of luxury goods to check that the goods will be sold online in an environment that corresponds to the qualitative conditions that it has agreed with its authorized distributors", the ruling states.

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The case was bought by beauty giant Coty, which owns brands such as Marc Jacobs and Calvin Klein, but is expected to set a precedent.

Welcoming the decision, Coty said: "After years of uncertainty, this means luxury brands can determine how they are placed on digital platforms and it is a clear ruling for the protection of luxury brands" image, the defence of our teams' work and the protection of consumers' rights and information'.

After intense lobbying by LVMH, Richemont and other luxury goods companies, European Union antitrust regulators laid down rules in 2010 allowing brand owners with less than a 30 percent market share to block online retailers without a bricks-and-mortar shop from distributing their products.

The case is C-230/15 Coty Germany.

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