Court fines eBay €40m for selling fake luxury goods

A PARIS court yesterday ordered Internet auctioneer eBay to pay €40 million in damages to Louis Vuitton for selling fake luxury goods online.

The commercial court also barred eBay from selling four perfume brands — Christian Dior, Kenzo, Givenchy and Guerlain — 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 LVMH’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.”

eBay was ordered to pay €19.28m to LVMH and €16.3m to its sister company Christian Dior Couture for damage to their brand images and causing moral harm. It must also pay €3.25m to the four perfume brands for sales in violation of its authorised 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 recognises and the amount sought,” said Pierre Gode, an aide to LVMH president Bernard Arnault.

Gode said the decision was “important for the creative industry” and it “protected brands by considering them an important part of French heritage”.

LVMH, the world’s leading luxury brand, sought €50m in damages from US-based eBay Inc and its Swiss subsidiary eBay AG for the auctions of fake goods and unauthorised sales of perfumes. The commercial court found eBay 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 per day.