eBay ordered to pay 38.6m for selling luxury fakes
Thursday, 03 July 2008

Times Online

The online auction site has been ordered to pay compensation by a judge in Paris for allowing users to trade counterfeit items
eBay has been ordered to pay €38.6 million compensation to LVMH, the French luxury goods group, for allowing fake versions of its products to be sold on the online auction website.

The decision by a judge in Paris comes a month after eBay lost a similar case against Hermes, another luxury brand, and was ordered to pay €20,000.

In today’s case, LVMH demanded €50 million in damages after claiming that eBay’s French business had not done enough to prevent users selling counterfeit items including Louis Vuitton-branded handbags, perfumes and sunglasses.

LVMH told the court that in 2006, 90 per cent of the LVMH-branded goods for sale on eBay were fakes.
eBay, the world’s largest online auctioneer, was ordered to pay €19.28 million to LVMH and €17.3 million to subsidiary Christian Dior Couture for damage to their brands.

In addition, eBay was ordered to pay €3.25 million to four perfume brands: Christian Dior, Kenzo, Givenchy and Guerlain or unauthorised sales.

eBay, which is planning to appeal against the decision, said: “If counterfeits appear on our sites we take them down swiftly, but today’s ruling is not about our fight against counterfeit; today’s ruling is about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers everyday. We will fight this ruling on their behalf."

eBay, which said $60 billion dollars of goods were sold on its site in 2007, is defending a similar case on counterfeit goods brought by Tiffany & Co, the jeweller, in New York.

Graham Robinson, managing director of Farncombe International, which investigates counterfeiting, said today’s decision was a significant win for the luxury goods industry.

Mr Robinson said that judicial opinion appeared to be shifting in favour of brand owners and the ruling was a positive example of courts forcing online auction houses to take more responsibility for items sold.

eBay said $60 billion dollars of goods were sold on its site in 2007.

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