NEWSLETTER-2017

116 NEWSLETTER 2017 Selective Distribution Systems under the Light of Coty Decision* Att. Elif Mungan Introduction In its decision dated December 6, 2017, the European Court of Justice (“ECJ”) answered the questions referred by the Frankurt - Higher Regional Court in its request for a preliminary ruling. 1 The questions raised are with regard to the Coty Germany GmbH’s (“Coty”) contractual clause against its reseller Parfümerie Akzente GmbH’nin (“Akzente”), which prohibits Akzente from making online sales through third party platforms (amazon.de) or through the use of a different business name. The ECJ held that Coty is allowed to apply such clause, provided that it operates a lawful “selective distribution system.” Selective Distribution System The selective distribution system is mostly applied in the sales of branded products. It is a distribution system where the supplier under- takes to sell the contract goods or services, either directly or indirectly, only to distributors selected on the basis of specified criteria, and where these distributors undertake not to sell such goods or services to unauthorized distributors within the territory reserved by the supplier to operate that system. 2 For instance, cosmetics and electronic prod- ucts are appropriate products that are sold under selective distribution systems. * Article of December 2017 1 C-230/16 Coty Germany; 6 December 2017: http://curia.europa.eu/juris/celex.js f?celex=62016CJ0230&lang1=en&type=TXT&ancre= (Access date: 19 Decem- ber 2017). 2 The Vertical Agreements Block Exemption Regulation numbered 330/2010, Ar- ticle 1 (1) (e).