A Paris court on Monday ordered Internet auctioneer eBay to pay 40 million euros (63 ) in damages to for selling fake luxury goods online.
The commercial court also barred eBay from selling four perfume brands — , Kenzo, Givenchy and — in the ruling intended to send a strong message about copyright protection. eBay, the world’s largest online auctioneer, immediately announced it was lodging an appeal and rejected the view that the court decision was a victory for copyright law. “This decision is not based on combating counterfeit material. It is based on ‘s desire to protect its commercial practices and exclude competition,” said a spokeswoman for eBay in Paris.
“This is being done at the expense of the consumers and sellers to whom eBay is always offering opportunities,” she added. eBay was ordered to pay 19.28 million euros to LVMH and 16.3 million euros to its sister companyfor damage to their brand images and causing moral harm. It must also pay 3.25 million euros to the four perfume brands for sales in violation of its authorized network. LVMH hailed the decision as a major coup against illegal sales on the Internet.
“It is a major first, because of the principles that it recognizes and the amount sought,” Pierre Gode, an aide to LVMH president, told AFP. Describing eBay’s anti-counterfeit measures as “empty”, Gode said the court decision was “important for the creative industry” and that it “protected brands by considering them an important part of French heritage.”
LVMH, the world’s leading luxury brand, was seeking 50 million euros in damages from US-based . and its Swiss subsidiary eBay AG for the auctions of fake goods and unauthorized sales of perfumes. The commercial court found that eBay had committed “serious errors” by allowing the sales of fake LVMH goods and violating the sales distribution network set up by Louis Vuitton and Christian Dior Couture.
The court issued a cease and desist order to eBay, barring it from running ads for the perfume and cosmetic brands or face a fine of 50,000 euros per day. A full transcript of the decision is to be posted on the eBay sites in English and French within the next three weeks, the court ordered.
The ruling came amid a flurry of legal action against the online giant, which claims to have some 84 million active users in 39 markets worldwide. Earlier this month, eBay was convicted by a French court of selling counterfeit goods and ordered to pay 20,000 euros (30,000 dollars) in damages to French luxury group Hermes.
The court ruling, which marked a first in France, found eBay directly responsible for the sale on its website of three including two fakes, for a total of 3,000 euros. France’s traditional auctioneers took legal action against the online auctioneer in December, accusing it of encouraging trade in pirated and stolen goods.
A council representing the auction industry also accuses the Internet trader of breaking a French 2000 law that requires all auctioneers to be approved by the state. According to eBay, the total value of items sold on its trading platforms in 2007 was nearly 60 billion dollars.