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EBay to pay $61M for allowing auction of phoney bags, perfumes

01.07.2008 22:01 Shopping - Source: cbc.ca

EBay says it plans to appeal a decision that ordered the online auction site to pay $61 million US in damages to the luxury goods manufacturer LVMH.(CBC)

A French court on Monday ordered eBay to pay $61 million US in damages to LVMH — a manufacturer of designer goods — for failing to block the sales of knock-off items on the online auction site.

LVMH argued that eBay was not adequately safeguarding against the sale of counterfeit items, alleging that 90 per cent of Louis Vuitton handbags and Dior perfumes sold through the website were fakes.

EBay said it planned to appeal the decision.

"When counterfeits appear on our site we take them down swiftly, and today's ruling is not about our fight against counterfeiting," the company said in a statement quoted by the New York Times.

"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."

The ruling also recognized LMVH's claims that sales of its perfumes Dior, Kenzo, Guerlain and Givenchy were only considered legal when processed through authorized dealers. EBay will no longer be allowed to post auctions of the perfumes.

The ruling follows a similar decision issued in June in which the online auction site and one of its sellers were fined $31,000 US for selling fake Hermes bags. A French court chided eBay for being lax with its rules, saying sellers should be required to provide serial numbers and proper documentation.

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