Global News Journal
Beyond the World news headlines
The so-called “vertical restraints block-exemption regulation”, unveiled on Tuesday, set down new guidelines for online retailers who don’t operate a ‘bricks-and-mortar’ outlet. In doing so, it sought to resolve a debate that has been going on for years between luxury brand retailers such as Gucci and Chanel and discounters who sell big-name brands more cheaply from warehouses over the Internet.
If how quickly a company sends out a press release welcoming an EU decision is a measure of how popular that decision is, then the European Commission’s updated rules were just what luxury goods manufacturers were waiting to hear.
The European Alliance, which represents three-quarters of global luxury brands, and French luxury group LVMH immediately applauded the move, saying it recognised their arguments that image and exclusivity are essential to their multi-billion euro industry.
In essence, manufacturers can now bar online retailers that don’t have bricks-and-mortar outlets from distributing their products.