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Court fines eBay over fake goods

profile picture AEJAZ AHMED    Posted on 18 November 2008,  
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Court Fines eBay Over Fake Goods A French court has ordered eBay to pay 40m euros (£31.6m; $63m) to luxury goods group LVMH for allowing online auctions of fake copies of its goods. LVMH said eBay's French site had not done enough to stop the sale of counterfeit bags and perfumes. The brands affected include Louis Vuitton, Christian Dior and Givenchy. An eBay statement said LVMH was trying to "protect uncompetitive commercial practices at the expense of consumer choice" and added that it would appeal. 'Illicit' The case against eBay in a commercial court in Paris was brought jointly by six brands belonging to the LVMH group. Louis Vuitton Malletier, the group's handbag and luggage section, and clothing brand Christian Dior Couture accused eBay of "negligence" in allowing illegal copies of their goods to be sold in online auctions. Four perfume brands - Dior, Guerlain, Kenzo and Givenchy - sued for what they called "illicit sales" of their products. They alleged that even auctions involving their legitimate perfumes were illegal, because only specialist dealers were permitted to sell them. The court barred eBay from selling the four perfumes in future. LVMH spokesman Pierre Godet welcomed the decision, telling French news agency AFP that it "protected brands by considering them an important part of French heritage". 'Uncompetitive' But Vanessa Canzini, an eBay spokeswoman, 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 everyday. "We will fight this ruling on their behalf; we will be seeking leave to appeal.” According to the judgement, eBay must pay 19.28m euros in damages to Luis Vuitton Malletier, 17.3m to Christian Dior Couture and 3.25m to the perfume brands. The BBC's Hugh Schofield in Paris says the ruling is seen as a landmark, because it could oblige eBay to rethink its business model. Until now, this has been built around the simple notion of bringing together buyers and sellers, with minimal supervision from the company. The penalty is the second in a month imposed on eBay by French courts. On 4 June, a court in the eastern French city of Troyes found the auction site directly responsible for the sale of fake Hermes bags. It imposed a penalty of 20,000 euros jointly on eBay and the woman who offered the bags for sale.
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