By  on July 28, 2009

PARIS — European Union regulators Tuesday said they plan to adjust antitrust rules on distribution deals to take into account the stronger power of large retailers and the growing popularity of e-commerce.

Current regulations — which exempt some companies, such as luxury goods makers, from some competition rules — will expire in May. Under the current rules, luxury brands can choose where and how their products are sold, which means they can legally limit or ban their distribution on the Internet.

The luxury industry has contended that selective distribution of its products should continue beyond 2010, saying widespread distribution of luxury products on the Internet would ruin their exclusive image and boost the counterfeit trade.

Karl Lagerfeld, Chanel’s artistic director, told regulators in February that the Internet doesn’t convey “the unique feel and sophistication of luxury materials, refined tailoring and extraordinary attention to detail found in luxury fashion.”

LVMH Moët Hennessy Louis Vuitton and Compagnie Financière Richemont have made similar arguments to the EU officials.

On the other hand, large online retailers like eBay are advocating that restrictions on their ability to sell on the Internet are anticompetitive and should be outlawed. Earlier this month, eBay asked its customers in Europe to sign a Web petition against online trade barriers.

In drafting the new rules, the EU said it wants to take into account recent market developments, in particular the increased buying power of big retailers and the evolution of Internet sales.

As a result, it is proposing that manufacturers and retailers can be exempt from antitrust rules only if their market share is below 30 percent. The current rules restrict the 30 percent threshold only to manufacturers.

Interested parties will have until Sept. 28 to comment on the proposals.

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