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.

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