July 2008
eBay pay compensation - French site must do more
A French judge has ordered eBay to pay €38.6m to the French luxury goods group LVMH for allowing the sale of fake versions of their merchandise, in a ruling immediately appealed by eBay, who accused LVMH of having a hidden agenda to exclude sales competition.
LVMH claimed damages of about €50m because it said eBay's French branch had not taken sufficient precautions to stop sales of counterfeit goods. EBay takes commission from the sales made from counterfeit items and LVMH say that they should not profit from these sales.
This case is just a month after eBay was ordered to pay handbag maker Hermes €20,000 for permitting the sale of counterfeit goods. This is the latest case in a lengthy battle between luxury goods groups and eBay. Earlier cases include allegations from Tiffany for similar reasons last year, and legal action from L'Oreal over the sale of perfumes on the auctioneering site.
EBay says it has increased efforts to fight sales of counterfeit goods through programmes that target suspicious sales patterns vendors and block the sale of fake goods. These efforts however, clearly only go so far as eBay say that due to the nature of their site they have only a restricted responsibility and ability to regulate what is sold. The group that represents mainstream French auctioneers has also sued eBay, accusing it of trying to waive laws regulating the auction sector by claiming to be a broker.
Briffa comment:
The burden on an online auction site to police stock for sale is a big one. On the other hand if eBay is notified that a product on sale is counterfeit and fails to act, eBay could effectively be engaging in illegal activity. In the VIC eBay operates its VeRO procedure which allows proprietors to notify eBay of fake goods and in respect of which eBay will take action by way of delisting .Use of these actions in respect of goods where the proprietor is sure that the goods are fake can be highly effective.
For further information on counterfeiting please contact info@briffa.com.