Europe tightens rules for online luxury products trading

The European Commission directorate for competition has concluded a public consultation on new and tighter rules for online sales of luxury products via the internet.

It is now expected that the Commission will revise the 1999 directive which authorises agreements in the selective distribution sector in the EU despite the ban on any form of cartel. This directive runs out in May 2010 and the draft text replacing it is understood to have been completed.

Brussels insiders do not expect a complete abolition of the 1999 regime. The idea of selective distribution, enabling high value cosmetics producers for example to restrict their sales to selected resellers, is not to be challenged. However, the Commission is expected to introduce a rule which bans producers from demanding that distributors avoid online sales or bars them from certain online sites and which restrict online commerce as a result. In addition, the draft text also enables producers to demand that a distributor "sells at least a certain quantity of a product in value and volume terms" via real boutiques.

Cosmetics producers, for example, will be able to demand that their distributors have available a classic shop or showroom before being able to launch sales of their products online. The dual rules are reported to have upset both eBay and some major luxury product producers.