A French court on Monday ordered eBay, the online auction giant, to pay €38.6 million in damages to LVMH, the French luxury goods company, in the latest round in a long-running legal battle over the sale of counterfeit goods on the Internet.LVMH Moà«t Hennessy Louis Vuitton, a manufacturer of high-end leather goods, perfumes and other fashion and luxury products, successfully challenged eBay for a second time in the French court, arguing that 90 percent of Louis Vuitton bags and Dior perfumes sold on eBay are fakes.
The court ruled that eBay, based in the United States, was not doing enough to stamp out counterfeit sales.
“It’s a groundbreaking decision that will help protect creativity,” Pierre Godé, a member of LVMH’s supervisory board and an adviser to the chairman, Bernard Arnault, was quoted as saying by Bloomberg News. “It’s an important precedent.”
EBay vowed to appeal the ruling.
“When counterfeits appear on our site we take them down swiftly, and today’s ruling is not about our fight against counterfeiting,” eBay said from Paris. “It’s about an attempt by LMVH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers every day. We will fight this ruling on their behalf.”
EBay has faced a number of legal challenges in France, where luxury goods companies are fiercely protective of their brands. In another recent case, Hermês International in Paris successfully sued eBay for fake bags sold online. In that case, another French court fined eBay €20,000, or $31,600, in June for not properly vetting the sales.
That court concluded that eBay was not doing enough to combat counterfeit sales and should be requiring sellers to post more product information to guarantee authenticity.
The issue has resonated outside France, too. The U.S. jeweler Tiffany & Co. has sued eBay in the United States on similar grounds; a decision is pending in that case.
LVMH has also pursued other Internet companies, saying they help counterfeiters. The company has won several rounds against Google in France in a quest to require the search engine to remove online advertising from counterfeiters whose ads appear when the names of LVMH brands are typed in.