EC Law Creates E-commerce Confusion for Luxury Brands

A new draft of e-commerce laws in Europe could spark a wave of litigation warns a prominent lobbyist, with particular consequences reserved for auction sites such as eBay and luxury brands.

The new EC law is designed to grant brand owners greater control over who sells their items over the Internet within Europe, and in what quantity, in the hope that it will redress the bias currently in online retailers’ favour.

However, Jaques Lafitte, founder of Brussels lobby firm Avisa yesterday pointed out that certain rules are still not clear, in particular: "What if eBay opened a shop on the Champs Elysee in Paris; could it then sell as much luxury branded goods as it liked via the internet?"

In the new draft of the law, it states that asking distributors to limit the proportion of overall sales made over the Internet is against the law, but a footnote to the regulation states makers of luxury goods are allowed to request, “the buyer (retailer) sells at least a certain absolute amount (in value or volume) of the products offline to ensure an efficient operation of its brick and mortar shop".

Until this contradiction is unravelled, it is likely that confusion around the law will only spread and lead to strained relationships between suppliers and retailers. A public consultation on the law will run until September 28th 2009, at which point a resolution to the conflict is hoped to be reached.