Counterfeit Luxury Goods Cost eBay $61.7 Million in Damages
PARIS — The Internet auctioneer eBay was ordered yesterday to pay almost $62.9 million to luxury goods companies, including Louis Vuitton and Christian Dior, for allowing fake copies of their products to be sold via its Web site.
Louis Vuitton
GENUINE ARTICLE Louis Vuitton, which makes this wheeled suitcase, was founded as a purveyor of travel equipment.
A court in Paris found that eBay had committed "serious errors" and awarded damages of about $30.2 million and $25.6 million, respectively, to the two companies owned by the LVMH group.
It also ordered eBay to pay more than $5.1 million to four perfume brands — Christian Dior, Kenzo, Givenchy, and Guerlain — for "illicit sales" of their products, which should only be sold through specialist dealers. The court banned eBay from "broadcasting [advertisements] of perfume or cosmetic goods" of these brands or those "presented as such."
LVMH had accused eBay of knowingly letting people use its site to sell fake bags, lipstick, perfume, and clothes.
LVMH hailed the decision as a major victory against illegal sales on the Internet. "It is a major first, because of the principles that it [recognizes] and the amount sought," an aide to Bernard Arnault, LVMH's president, said.
Describing eBay's anti-counterfeit measures as "empty," the spokesman said the ruling was "important for the creative industry" and that it "protected brands by considering them an important part of French heritage."
However, eBay described the ruling as "indecent" and said it would continue to sell LVMH products on its site pending an appeal.
A spokesman for eBay Europe, Sravanthi Agrawal, said: "If counterfeits appear on our sites, we take them down swiftly, but today's ruling is not about our fight against counterfeit; today's ruling is about 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.
"We will fight this ruling on their behalf; we will be seeking leave to appeal."
The verdict is the latest blow to the online company. Earlier this month, it was ordered to pay about $31.4 million in damages to the French company Hermès for selling counterfeit goods.
