Are they allowed to do this? The European Court of Justice (ECJ) has looked at this issue and has now found that suppliers may prohibit their retailers in future from marketing the goods via third party online platforms, but only if the luxury image of the product is in jeopardy.
The decision of the ECJ confirmed the opinion of the Higher Regional Court in Frankfurt that selective distribution systems do not intrinsically infringe competition law. The highest court in the European Union has thus made it clear that manufacturers must be able to control the ways in which their products are presented online. The finding is based on the case of a luxury perfume supplier, which took one of its authorised retailers to court because the latter had sold some of its luxury cosmetics through Amazon against the manufacturer's wishes. Since the Higher Regional Court in Frankfurt had expressed doubt as to whether the contractual clause was reconcilable with the European Union's competition law, it referred the matter to the ECJ.
What consequences does the decision of the ECJ have for manufacturers of pet products who introduce a selective distribution system? They must first demonstrate the luxury character of their products, which might prove difficult in individual instances. The ECJ notes that the quality of luxury goods is not based solely on their material properties, but also on their prestige, which gives them a luxurious aura.