News Luxury brands can be blocked on Amazon & eBay under new EU ruling

Discussion in 'Business News & Resources' started by Cody, Dec 7, 2017.

  1. Cody


    Feb 17, 2016

    In a recent EU ruling the European Court of Justice had decided that luxury brands can now block online sellers and retails from selling their products on Amazon, eBay and other online marketplaces.

    In regards to competition rules, brands like Gucci and Dior can actually limit retailers and online sellers from selling goods, unless they can maintain the luxury image that Gucci and Dior have.

    This ruling comes into place following a recent case with high-end makeup brand Coty, who took legal action against a retailer selling their products without permission on Amazon Germany. The EU court found that Coty were in fact within their rights to block these sales, unless permission is given, and in this case Coty didn't want their products sold on mass-markets online selling sites like Amazon and eBay. This is to maintain the luxury image and high values of that brand. Selling at mass-market doesn't portray this image.

    Could the restriction of luxurious products hurt online sellers? If sales drop, then the stability of small businesses will surely suffer...

    A lobbying group that represents Amazon, eBay and Rakuten opposed this ruling, stating: "This judgement is bad new for consumers," claiming consumers will now face fewer choices of products to buy online, and face less competition when they want to shop on these marketplaces. On top of this, "It's also a major setback for small firms across Europe that are trying to develop their online businesses whilst protecting major mass market brands."

    Coty responded to the ruling by saying: “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 defense of our teams’ work and the protection of consumers’ rights and information.”

    What does this mean for other brands and products sold on Amazon and eBay?

    In order to sell luxury goods online, marketplaces will need to now setup a contractual relationship with brands in order to carry on with the selling of these products on their marketplaces. However, Jakob Kucharczyk (lobbying group for online marketplaces) did also state, that the ban of marketplace brands can only take place if the brands concerned actually hold or preserve a luxury image. Meaning, that a massive amount of the products sold on Amazon and eBay should be save as they don't hold a luxury image.

    What are your thoughts?
  2. Pembroke


    Feb 10, 2011
    Hi Cody, Maybe the answer is for someone to produce a new luxury brand that is aimed at the mainstream online markets, if Ebay, Amazon, Rakuten etc could be persuaded to collaborate they should be able to produce their own luxury brand and with the finest ingredients and with a bit of clever marketing I'm sure it could be positioned at the same level as the brands that have fought for their exclusivity

    If that then reduces the current luxury brands market share well there's many a business that's come unstuck by ignoring the current reality of living in a fast paced modern connected world. Why should these 'luxury' brands be any different.
    Jed and Cody like this.
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