Luxury Groups Back New EU Online Restrictions

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Brussels–New European Commission rules which could restrict the sale of luxury goods online have been backed by groups including LVMH and PPR.
The Vertical Restraints Block Exemption Regulation effectively means that brand owners can stop online-only retailers from selling their products, despite fears that it could restrict consumer choice.

The EU has promised to monitor the situation closely to counter those fears, pointing out that the regulation, which comes into force in June, has a one-year transitional period.

Luxury brand owners such as LVMH had lobbied for a change in the rules, arguing that some online retailers were profiting from the strength of their brands, but without having to bear the usual costs of bricks-and-mortar retailers.
The Commission said the regulation would permit brand owners to choose distributors on the basis of quality, allowing them potentially to refuse distribution through an online-only company.

“The rules adopted Wednesday will ensure that consumers can buy goods and services at the best available prices wherever they are located in the EU,” said EU competition commissioner Joaquin Almunia.

To counter criticism from online retailers such as eBay and Amazon  and from consumer groups that the provision could restrict user choice, the European Commission said it would closely monitor developments.

The new regulations were welcomed by LVMH, which said it would sustain the growth of the industry and allow it to meet the expectations of consumers. The regulation will remain in force until 2022.

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