EU enquiry into Selective Distribution
As founders of the European Cultural and Creative Industries Alliance (ECCIA), Walpole welcomed the recent publication of the European Commission’s final report on its e-commerce sector enquiry, particularly in light of the recent Coty selective distribution case.
The Report clearly demonstrates the growth of e-commerce in a highly competitive environment under the current rules. This is especially true of the European high-end sector which is today a major digital player, with the Internet being a cornerstone of its business model and a very efficient direct vector of the high-end image of its products towards consumers, in line with the ambitions of the Digital Single Market strategy. In particular, we welcome that the report:
– Emphasises that the quality of the product and the brand image are important components of the brands’ ability to attract customers;
– Acknowledges the validity of the selective distribution principle when it is used appropriately and in line with the European Commission guidelines on vertical restraints – which is the case for the high-end sector;
– Recognises the relevance of the brick and mortar shops, in particular for the luxury sector;
– Underlines that the decision not to sell on marketplaces, when based on justified criteria, is not considered as a hardcore restriction.
If selective distribution is key to your business model, Walpole feels it is prudent to have a written policy, explaining why that model has been chosen, the steps the owner takes to protect the brand’s prestige and the admittance criteria into the selective distribution system. Legal advice should be sought in putting that policy document together.