With the recent order of October 19th 2020, the Milan Business Court recognized Amazon as an active hosting provider, condemning the platform manager as a precautionary measure to immediately cease the promotion and sale of some luxury products.
The case concerned the presence on the well-known marketplace of some cosmetic and perfumery products bearing several famous brands, marketed by the parent companies with precise agreements with authorized distributors aimed at maintaining a luxury image associated with the brands.
Selective distribution agreements restrict competition on the market and are considered lawful only if they deal with specific categories of products, such as luxury products. In such cases, the compression of free competition is justified by the need to safeguard the prestige of the trade mark and is implemented by imposing certain quality and professional standards on retailers.
In the case examined by the Court of Milan, the parent companies allowed the online distribution of the products only through the websites of authorized retailers – subjected to rigorous examination also from a graphic point of view – and only on condition that a virtual space reserved exclusively for those brands was prepared, with the exclusion of any advertising reference to different products and with the prohibition of associating the brands with other products or services not related to perfumery or cosmetics.
The promotion of those products on the Amazon platform was therefore considered to be damaging to the reputation and image of the brands because on that platform (lacking the quality requirements required and not authorized by the parent companies) the products were associated with products belonging to poor quality categories such as cat food, toilet paper or insecticides.
Amazon defended itself by invoking the privileged liability regime provided by Legislative Decree 70/2003 for passive hosting provider, claiming to have merely facilitated the relationship between buyers and sellers, without having actively participated it and without any intervention on the published content.
In fact, in accordance with the provisions of the current legislation on electronic commerce, the liability of the passive provider arises only if the passive provider has had real knowledge of the illegality of the published content or of the activity carried out by third parties or if, having become aware of this illegality, he did not immediately act on the orders of the judicial authority or gave information to the authority itself.
The Court of Milan, on the other hand, having examined the activity actually carried out by the platform, considered that Amazon’s conduct was not simply to store or transport data, since in relation to those products Amazon took care, among other things, of the management of the storage and shipping of products, controlled the data entered by third-party retailers, made available to buyers a customer service and carried out specific promotional activities.
Amazon was therefore inhibited with immediate effect the promotional and sales activity of the disputed luxury products.