France To Cosmetics Companies: Get Online Or Else!

Legal Issues

from the it's-the-21st-century dept

It’s the time of the year when we’re inundated with stories about online shopping, as if it were still this totally new phenomenon that warrants special attention. That being said, there are apparently several holdouts from the trend, as some companies have taken aggressive moves to prevent their products from being sold online. In France, ten cosmetics companies have reached a deal with the government, agreeing to become more flexible about internet sales. French regulators had accused these companies of “distorting the market” by restricting how their products could be sold. The reasons for not wanting to sell online aren’t completely clear. It seems in some cases that it has to do with maintaining the mystique and aura of the brand. In any event, these companies should be able to come to any agreement with distributors that they want. If they insist on only physical sales, and that’s what the retailer wants, then it doesn’t seem like a problem. Making the whole discussion even sillier, is that there’s nothing preventing another party from acquiring this merchandise, and then going on and selling it how they like, assuming the right of first sale were respected. It would be a different matter if, say, a large retail firm were telling its suppliers that they couldn’t let their products get sold online, as Wal-Mart’s done with DVD sales, pressuring Hollywood studios not to make their films available for download. Even this action might not warrant government intervention, but it’s a lot closer to the market distortion that has the French so worried.