UK NEWS

EBAY FINED £30M FOR SELLING FAKE DESIGNER BAGS

BAG LADY: A real LV item

Sunday June 1,2008

By Louise Barnett Consumer Editor

AUCTION website eBay has been ordered to pay the Louis Vuitton group £30.53million over the sale of fake goods.

Luxury goods stable LVMH went to court in France to accuse eBay Inc’s French arm of failing to prevent the sale of counterfeit items on its site and to seek damages of around £40million.

But eBay criticised the court’s decision and announced plans to appeal.

The Paris-based Tribunal de Commerce’s ruling is the latest episode in a long fight between luxury goods makers and the world’s biggest online auctioneer. It came one month after another French court ordered eBay to pay the Hermes brand nearly £16,000 over the sale of fake goods.

But eBay hit back by saying it always swiftly pulled any fake goods from its website.

It criticised the Paris case as “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”.

The auction site said the ruling risked affecting the sale of genuine new and second-hand products. Luxury goods groups have accused eBay, which earns commission on sales via its sites, of providing a marketplace for vendors who knowingly sell fakes.

But eBay said: “It is clear eBay has become a focal point for certain brand owners’ desire to exact ever greater control over e-commerce.”

The LVMH (Louis Vuitton–Moet Hennessy) group includes 60 brands. Yesterday’s ruling covered cases by LVMH and Dior Couture and perfume brands Dior, Guerlain, Givenchy and Kenzo. A spokesman for LVMH said: “For the first time in France, the ruling clearly states the principle under which auction websites have to ensure their activities do not permit unlawful dealings.

The court has dismissed the argument used by eBay to exonerate itself that its clients are solely responsible, saying eBay is not a host but a broker.

In Germany, eBay lost a six-year case to Montres Rolex last year when a court ruled eBay must do more to halt the sale of fake Rolex watches.

LVMH filed suit against eBay after winning an earlier French court suit against Google Inc, which it accused of letting makers of fake Louis Vuitton handbags advertise on its site.