Ian Giles and Richard Whish QC discuss their views on AG Wahl’s opinion in ‘Coty’ selective distribution.
Hello, I’m joining you on 6 December 2017 that the European Court of Justice has issued its judgment in the Coty case. The long awaited case that deals with the question of whether brand owners are allowed to restrict the sale of their products on third party online platforms. This case has had a lot of attention in the run up. Advocate General Wahl issued his opinion in the summer and said that these types of restrictions were permissible. There’s a longer video which I did with Professor Richard Whish which is available from last week which goes into the case in some more detail, but the headline point is the Court has followed the Advocate General’s opinion. That means that it is now law from the highest court in the EU that a brand owner can restrict sales of their products in a selective distribution system through third party platforms. The brand owner cannot exclude their distributors selling online at all but they can restrict sales through online platforms that don’t meet their quality criteria or third party websites as they say. Will this judgment end some of the controversy we’ve seen in this area? We’ve seen a number of court cases in national courts, as well as, decisions by competition authorities across Europe which have taken different approaches on these questions and we would hope that the Court of Justice ruling here in Coty will mean that there is more certainty for business. But nothing is certain. We have already seen the President of the Bundeskartellamt, the German authority, Andreas Mundt, come out and say that he thinks this case Coty can be disguised on its fact from a number of the other scenarios they have to deal with. So, it may well be there remain some bumps in the road both for distributors trying to work out how they can act and for brand owners working out what restrictions are permissible in their distribution networks. So, it remains a space that companies will have to watch closely.