Tata Motors Ltd. (TTMT)’s Jaguar Land Rover unit won a European Union court challenge over limiting its sales network for luxury cars.
The European Court of Justice ruled Jaguar Land Rover, the maker of the XK sports car and Discovery SUV, doesn’t have to follow specific rules or disclose its reasons for choosing car dealers in a dispute with Auto 24 SARL, which had sought unsuccessfully to distribute the cars in France.
“It is not necessary for such a system to be based on criteria that are objectively justified and applied in a uniform and non-differentiated manner,” the Luxembourg-based tribunal said in its judgment. Companies also don’t have to publish their selection criteria which may compromise business secrets or aid collusion.
The ruling has implications for other luxury goods makers such as LVMH Moet Hennessy Louis Vuitton SA (MC) and Chanel SA which want to limit some distributors’ sales. They argue that their brands can be harmed if they are sold by unauthorized retailers, particularly online resellers.
Jaguar Land Rover, a U.K.-based unit of India’s largest carmaker, didn’t immediately respond to a call and an e-mail seeking comment. Auto 24’s lawyer in Paris didn’t immediately respond to an e-mail seeking comment.
Rulings from the European Union’s highest court are binding. The Luxembourg-based tribunal rules on points of law and final decisions on the details of the case are left to France’s Cour de Cassation, the country’s highest appeals court.
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