Luxury goods and e-commerce

The Court of Justice of the European Union (CJEU) decided on 6 December 2017 in the case Coty, that prohibitions of third-party platforms in a selective distribution network are permitted if the considered product has a ’’luxury image“.

In fact, the image depends on the consumers point of view, no matter whether it is intentionally or not by the producer. Therefore, the economic valuation often requires consumer surveys.

As a result, the CJEU concludes, that the image of products does not only depend on their physical characteristics. Moreover, 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 allows it to clearly identify 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. 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. From the technical viewpoint the online supported consumer survey quantifies the utility for each product feature. If consumers’ willingness to pay for the feature “luxury” is higher, then the product can be expected to be a luxury good. In accordance with the decision of the CJEU in the case Coty, producers of luxury goods can permit the distribution of these goods on third-party platforms.

EE&MC has multiple experiences in this area and is therefore able to examine cases in accordance with the legal requirements of the CJEU.