EBay fined £31m for fake goods sales

French ruling on designer labels thought to pave the way for further lawsuits

News, 1 July 2008

eBay, the internet auction house, has been ordered to pay £31 million in damages for selling fake goods online.

A French commercial court yesterday ordered eBay to pay LVMH Moet Hennessy Louis Vuitton the money after selling counterfeit goods such as Louis Vuitton-branded handbags, perfumes and sunglasses. A spokesman for LVMH said the award was a first in terms of the amount and the principles recognised.

However, eBay said it would appeal against the decision as it felt LVMH, home to brands such as Fendi, Marc Jacobs and Givenchy, was promoting uncompetitive commercial practices.

A spokeswoman for eBay said the company had a Certified Rights Owners Programme which allowed people that held the intellectual copyright on brands to report goods to eBay that they thought were fake. eBay then took steps to remove the items. Last year, eBay removed some 2.2 million potentially counterfeit listings and suspended 50,000 sellers.

Yesterday's decision is likely to pave the way for further lawsuits against eBay.

Steve Kuncewicz, media and intellectual property expert said: "In the fashion industry, brand and retail identity means everything, which is the reason why eBay is coming under such heavy pressure from designers and labels to stamp out counterfeit goods being sold on their platform.

"The idea is that the time and money that fashion houses spend on developing new products should be protected by their being able to earn an income from selling them. However, against a background where the average person on the street simply cannot afford the original, many are willing to buy a counterfeit instead, with recent research showing that people don't have a problem with wearing knock-offs as long as they're seen with the right logos.

"Because of its sheer size, anonymity and global reach, eBay is an ideal 'store front' for the sale of counterfeit goods. It will be interesting to see if eBay takes a more proactive stance on this issue as a result of this and the various other court cases currently pending against them."