French court orders eBay to pay damages of $61.6 million to French brands

A commercial court in Paris has upheld a claim against eBay by luxury brands manufacturer group Louis Vuitton Malletier and Christian Dior Couture, ordering eBay to pay damages to the brands totaling €38.8 million, or about $61.6 million, for the sale of counterfeit goods on its site. EBay says it will appeal the decision.

In the ruling, the Tribunal de Commerce court found eBay guilty of “gross misconduct and detrimental breach,” saying that eBay had not taken the necessary measures to prevent the sale of the counterfeit merchandise.

EBay has been ordered to pay €16.4 or $26 million to LVMH and €9.28 million or $14.7 million to Christian Dior. The court also ruled that in allowing the sale of perfume brands Christian Dior, Guerlain, Givenchy and Kenzo on its site, eBay was guilty of practicing unlawful sales. Those brands are legally available only through networks of distributors agreed on by the brands. The court ordered eBay to pay €3.2 million or $5 million in damages to the perfume brands.

The ruling stipulates that eBay must report the verdict on its English language and French sites, and it requires that a report of the decision must be published in three French or international newspapers.

In a statement, eBay charges that the French brands’ claim is less about stamping out counterfeit sales than it is about their efforts to restrict competition. “The attempt to use the ruling to confuse the separate issues of counterfeit and restrictive sales suggests that counterfeit suits are being used by certain brand owners as a stalking-horse issue to reinforce their control over the market,’ eBay said in a statement. “It is clear that eBay has become a focal point for certain brand owners’ desire to exact even greater control over e-commerce.”

Last month, a ruling from a different French court ordered eBay to pay luxury leather goods manufacturer Hermes €20,000 or about $31,000 for allowing the sale of counterfeit handbags on the site.

EBay says it’s increasing its efforts to combat counterfeit, investing more than $20 million annually to identify and remove counterfeit items from its site. It also says it has 2,000 employees dedicated to finding and deleting counterfeit items from its site.
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