The highest European Court has published an Opinion indicating that luxury brands may prevent retailers from selling via online marketplaces in order to preserve the luxury image of the products in question.

The Opinion is not legally binding, and the landmark judgment of the Court is awaited in the coming months. The judgment will give clarity on an issue that has divided regulators and courts around the EU. If the judgment follows the Opinion, it will be seen as an important victory for brands in the fight to retain control over online sales.

The Opinion indicates that luxury brands operating selective distribution may ban their authorised retailers from using third party platforms and online marketplaces. Such a ban may fall outside the Article 101 prohibition altogether, or otherwise may benefit from exemption. The Opinion also leaves open the possibility that non-luxury brands may impose such a ban within the safe harbour of the Vertical Agreements Block Exemption. If this is the case, this could have potentially wide reaching implications.

The views expressed in the Opinion are consistent with those of the European Commission, but at odds with the position adopted by certain national courts and competition authorities. The Commission considers that online marketplace bans do not generally amount to a de facto prohibition on selling online and should not be regarded as hardcore restrictions within the Block Exemption. 

The ECJ will have the final word in this case, and we await the ECJ’s judgment with interest. 

You can read our briefing here http://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Competition_EU_and_Regulatory/e-commerce-luxury-brands-prevent-retailers-selling-via-online-marketplaces-310717