eBay to Appeal Counterfeit Ruling

Company fined $63M, barred from selling certain luxury brands

by Auctiva.com staff writer
- Jul 01, 2008

With its intellectual property policy again under fire, eBay is vowing to appeal the second court ruling in a month that held the e-commerce giant directly liable for the sale of high-fashion knock-offs on its auction site.

A French court on Monday ordered eBay to pay a total of $63 million to six Louis Vuitton Moet Hennessey (LMVH) brands for damaging their brand images and causing moral harm by allowing the sale of fake goods and violating the sales distribution network set up by the companies. The court also barred eBay from running ads for products from perfume and cosmetic brands Christian Dior, Kenzo, Givenchy and Guerlain.

The ruling by the Tribunal de Commerce in Paris came just three weeks after eBay was fined $30,000 by another French court for not doing enough to stop the sale of fake Hermes bags.

eBay says it will appeal the latest decision, and contends that LMVH is trying to hinder Internet auctions because it's a business model the fashion house hasn't yet figured out how to profit from.

"If counterfeits appear on our sites, we take them down swiftly," eBay said in a released statement. "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 every day."

eBay insists it has beefed up its verified rights owners (VeRO) program, investing more than $20 million a year to find and remove bogus goods from its site. Additionally, the company says it has partnered with more than 18,000 brand owners globally and employs more than 2,000 people in the anti-counterfeit effort.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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