NEWSLETTER-2017

117 COMPETITION LAW Background Information Coty sells luxury cosmetics in Germany. It markets certain brands in that sector via a selective distribution network, on the basis of a selective distribution contract, also used by the undertakings affiliated to it. For many years, Akzente has distributed Coty Germany goods, as an authorized distributor, both at its brick-and-mortar locations, as well as over the internet. Internet sales are carried out partly through its own online store, and partly via the platform ‘amazon.de’ . Coty revised the distribution contracts by providing an online sales restriction through third party platforms. Akzente refused to sign the amendments set forth in the selective distribution contract. Coty, therefore, brought an action before the national court of first instance, seeking an order prohibiting, in accordance with the said clause, the defendant in the main proceedings from distributing products bearing the brand at issue via the platform ‘amazon.de’ . The German court, however, dismissed Coty’s action, since its request is contrary to Euro- pean Union and German competition laws. Following Coty’s appeal, the Frankfurt Regional Court stayed the proceedings, and referred a number of questions to the ECJ for a preliminary ruling. The Decision ECJ’s resolutions are enlightening with regard to the selective distribution systems that are applied for luxury products. Firstly, the ECJ concluded that a selective distribution system for luxury goods designed, primarily, to preserve the luxury image of those goods, complies with that provision to the extent that resellers are chosen on the basis of objective criteria of a qualitative nature that are laid down uniformly for all potential resellers and applied in a non-discriminatory fashion, and that the criteria laid down does not go beyond what is necessary. The ECJ then evaluated Coty’s internet sales restriction via third party platforms. According to ECJ, firstly, this restriction provides the supplier with a guarantee, from the outset, in the context of electronic commerce, that those goods will be exclusively associated with the authorized distributors. Secondly, the prohibition enables the supplier