* Top brands want to choose distributors or ban online sales
* Online platforms say curbs, bans are anti-competitive
* Germany says don't block innovative distribution networks
* France says online sales curbs safeguard brands' prestige
By Foo Yun Chee
LUXEMBOURG, March 30 German beauty products
maker Coty rejected claims that its distribution policies imply
a blanket ban on online sales, arguing that its main concern was
to safeguard the cachet of its luxury brands such as Marc
Jacobs, Calvin Klein and Chloe.
The comments by the company, part of U.S. group Coty Inc
, came in a landmark case which could determine whether
luxury goods companies can stop retailers from selling their
products via online marketplaces such as Amazon or eBay
Brand owners have for the past decade argued that they
should have the right to choose their distributors to protect
their image and exclusivity. Online platforms say such curbs are
anti-competitive and hurt small businesses.
The issue is significant for Europe which accounts for 70
percent of global luxury sales.
The company told Europe's top court that its dispute with
German retailer Parfumerie Akzente, which sells its goods on
sites including Amazon against its wishes, was not about
imposing a ban on such trade.
The company's agreements preventing retailers from selling
on third-party online platforms are aimed at preserving the
image and quality of its products, its lawyer Andreas Lubberger
told the Court of Justice of the European Union (ECJ).
"In Germany, we have a saying a picture is worth a thousand
words, in this case a name is worth a thousand words," he said.
Coty brought the original case in a Frankfurt court which
subsequently sought guidance from the ECJ.
Parfumerie Akzente's lawyer Oliver Spieker questioned the
validity of Coty's arguments.
"If you are talking about a well-known marketplace which
sells products to consumers, then you need proper considerations
to ban it," he told judges.
"Amazon and eBay already sell well-known brands, do these
brands have more to lose than Coty? L'Oreal for
example has a platform on Amazon," he said.
The German government, a proponent of online trade, said
online platforms were key outlets for small- and medium-sized
"Restrictions must never be abused in order to close off new
innovative formats of distribution," its lawyer Thomas Henze
Luxembourg sees a blanket ban as disproportionate and
unjustified, its lawyer Philippe-Emmanuel Partsch said. Amazon's
European headquarters is located in the Grand Duchy.
France, home to luxury brands such as Louis Vuitton, Chanel
and Christian Dior, sprang to Coty's defence.
Online curbs safeguard the prestige and image of such
products in the eyes of consumers, Julie Bousin, lawyer for the
French government, said.
Italy, Sweden, the Netherlands and Austria also intervened
in the case. An ECJ court adviser will issue a non-binding
opinion in the coming months. Judges who follow such
recommendations in four out of five cases, will rule shortly
The case is C-230 Coty Germany.
(Editing by Keith Weir)