EU Competition Law—Vertical Agreements: EU Court of Justice Allows Luxury Goods Manufacturers to Prohibit Online SalesSullivan & Cromwell LLP - December 21, 2017
In a judgment on 6 December 2017, the Court of Justice of the European Union ruled that, in the context of a selective distribution network for luxury goods, suppliers can contractually prohibit their distributors from selling the goods on third-party internet platforms visible to the public. The Court found that such a restriction is justified to preserve the luxury image and “aura” of the goods.
The judgment provides welcome clarity on the conditions under which EU competition law permits online sales to be contractually limited in selective distribution contracts for luxury goods. However, the judgment does not apply to industries other than luxury goods.