BizAims

On June 30, a Paris court ordered one of the biggest Internet auctioneers, eBay, to pay 40 million euros (which is about 63 million USD) in damages to the French-based luxury fashion and leather goods brand and company, Louis Vuitton, due to the fact that the auctioneer was selling counterfeit luxury goods of the brand online. In addition the commercial court banned the Internet auctioneer from selling such perfume brands as: Christian Dior, Kenzo, Givenchy and Guerlain, having the goal of providing a message about copyright protection.

"This decision is not based on combating counterfeit material. It is based on LVMH's desire to protect its commercial practices and exclude competition. This is being done at the expense of the consumers and sellers to whom eBay is always offering opportunities," outlined a spokeswoman for eBay in Paris.

After eBay was accused of selling fake goods labeled with famous brand names, the court ordered the auctioneer to pay 19.28 million euros to the French holding company, LVMH, which is also the largest luxury goods conglomerate in the world. Besides eBay also had to pay 17.3 million euros to Christian Dior Couture, the sister company of LVMH, for moral harm. In addition, for sales in infringement of the authorized network of four perfume brands, eBay was ordered to pay 3.25 million.

"It is a major first, because of the principles that it recognizes and the amount sought," an aide to LVMH president Bernard Arnault, Pierre Gode told Agence France-Presse. He stated that the anti-counterfeit measures taken by eBay were in fact "empty" and added that the decision of the court was "important for the creative industry" and that this decision was able to defend luxury brands "…by considering them an important part of French heritage."

It is worth mentioning that LVMH looked forward for eBay and its Swiss subsidiary eBay AD to pay 50 million euros for selling fake products. The final word of the commercial court was that eBay made "serious errors" by making the sales of fake LVMH goods available, as well as by infringing the sales distribution network established by Louis Vuitton and Christian Dior Couture. According to the court's decision eBay had to choose between abandoning all ads related to the perfume and cosmetic brands and a daily fine of 50,000 euros. In addition, the court ordered eBay to place on its website a full transcript of the court's decision in two languages French and English.

According to the information provided by eBay, in 2007 the Internet auctioneer sold goods with a total value of 60 billion dollars.