Ebay Sued Again
Shares City - Ebay Fined $61 Million
In a decision which has huge implications for Ebay, a French court has ordered it to pay €38.6m ($61m) to LVMH the luxury goods group for allowing the sale of fake goods such as Louis Vuittonhandbags on its auction site. Ebay immediately lodged an appeal against the decision “in the name of its customers”.This decision comes just a month after another French court ordered Ebay to pay Hermes €20,000, also for allowing the sale of counterfeits. This is but the latest episode in Ebay’s fight with luxury goods makers.
”We will fight all these decisions in the name of Ebay users, and we have decided to appeal,” Ebay said.
”If counterfeit goods are put up for sale on our site, we scrap them as soon as possible.”
EBay also said that LVMH has a hidden agenda, namely protecting “commercial practices that exclude all competition.”
LVMH claimed the damages because it says Ebay’s French site had failed to do enough to prevent sales of counterfeit goods.
Today’s ruling concerned separate cases brought by several different LVMH brands – LVMH and Dior Couture, and perfume brands Dior, Guerlain, Givenchy and Kenzo.
Ebay has also been sued by jewellers Tiffany. Tiffany claims that Ebay also did not do enough to prevent sales of counterfeits, and Ebay also faces action from L’Oréal regarding the sale of perfumes.
The issue has significant implications for Ebay in particular but also for online commerce in general.
Ebay is accused of encouraging forgers by providing a ready marketplace for vendors to sell fake goods.
Ebay argues that it has increased its fight against counterfeits via programs that track sales patterns by particular vendors and also be VeRO (verified rights owners), a system designed to help block sales of counterfeit goods.
Ebay, which had sales of about $60 billion last year, says it has only a limited responsibility and also only a limited ability to control what people sell on its site. Ebay has also been sued by the “conseil des ventes”, which represents offline French auctioneers. They claim Ebay is trying to get round laws regulating auctions by claiming to be a “broker”.
All in all it looks like difficult times ahead for Ebay, which has not endeared itself to many people since it set up business. It consistently annoys the manufacturers of genuine goods by claiming it has little control over what is sold on its site and encouraging manufacturers to police Ebay themselves and report any suspicious looking items. It also annoys the people who sell on Ebay by constanly increasing commissions, thereby forcing them to find other sites on which to sell their goods.
Ebay 3-year Chart
