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Cartels and Anticompetitive Agreements

Luxury goods and e-commerce

Luxury goods hold a special position in European competition law. In December 2017, the Court of Justice of the European Union (CJEU) decided that prohibitions on the sale through third-party platforms in a selective distribution network are permitted if the product has a “luxury image”. This Coty judgment has given case law on what luxury product suppliers can forbid their distributors and resellers.

 

This image depends on the consumer’s point of view, no matter whether the producer intended for a product to be regarded as a luxury item. Therefore, the economic valuation in such cases often requires consumer surveys.

 

The CJEU concluded that the image of products does not only depend on their physical characteristics. The luxury aura of a product is a result of its prestigious image. This enables consumers to distinguish between luxury and less luxurious goods. Consequently, consumer surveys must be designed in a way that allow a clear identification of the attractiveness of products.

 

Modern market research tools, like conjoint analysis, make the identification of a luxury aura of products possible. It is a suitable method to measure consumer preferences. This type of analysis is done with the help of online consumer surveys.

 

Can the considered product be identified as a luxury product? Conjoint analysis provides what the consumers’ maximum level of willingness to pay for the product feature “luxury” is. If consumers’ willingness to pay for the feature “luxury” is higher, then the product can be expected to be a luxury good.

 

EE&MC has a range of experience in the area of consumer research, and is therefore able to examine cases in accordance with the legal requirements of the CJEU.

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