eBay loses Louis Vuitton dispute

Ebay faces €41.7m fine for failing to prevent sale of counterfeit goods

Online auctioneer eBay has been slapped with a €41.7m fine by the French courts for failing to prevent the sale of counterfeit LVMH goods on its web site.

French courts said that eBay should pay Louis Vuitton owner LVMH €1.7m (£1.5m) for the damage, in addition to a €40m fine for not preventing the sale of fake goods on its online marketplace.

It is estimated that more than 1,000 LVMH products, including clothes, accessories and cosmetics, have been sold since the injunction was issued in 2008.

"This decision constitutes an important step in the fight against unlawful practices. Enforcing selective distribution ensures the security and quality of products for consumers, it also contributes to the ongoing worldwide success of European luxury goods brands," LVMH said in a statement.

eBay hit back, saying that the outcome ‘hurts consumers by preventing them from buying and selling authentic items online’.

It said: "The injunction is an abuse of 'selective distribution'. It effectively enforces restrictive distribution contracts, which is anti-competitive. We believe that the higher courts will overturn this ruling," said the general manager of eBay France, Alex von Schirmeister.

This is not eBay’s first high-profile court battle this year. The online auction site was sued by cosmetics giant L'Oreal over the sale of counterfeit goods on its web site in May, but eventually won the case, arguing it could not be held responsible for such acts.