eBay Ordered To Pay $63 Million To LVMH In Counterfeit Lawsuit

eBay has been ordered by a French court to pay a sum of nearly 40 million Euros ($63 million) to luxury group LVMH, on the grounds that eBay has not taken sufficient steps to curtail the sale of counterfeit items on its website, according to a report published in Bloomberg on Monday.  The court's decision involved a variety of LVMH divisions, including Guerlain, Kenzo, Givenchy, and Dior.

LVMH, the world's largest luxury conglomerate, claimed in their suit that the Internet auction giant has a stringent responsibility to combat fraud.   The group stated in a report that 90 percent of the perfumes labeled with Louis Vuitton and Dior sold by eBay in 2006, were not authentic.

In an emailed statement, eBay vowed to appeal the ruling, stating: "Today's ruling is not about our fight against counterfeits; 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."

In 2007, eBay oversaw the sale of approximately $60 billion worth of merchandise.  eBay has stated that it has increased its efforts to deal with counterfeiting through programs which analyze suspect sales patterns, and through the VeRO system (Verified Rights Owner) which blocks counterfeit transactions.  Notwithstanding, eBay iterated that it is a host for independent sellers, and as such is limited in its ability and responsibility to regulate what is presented and sold through its channels.

In recent years, eBay has had other related lawsuits filed against it in both the United States and Europe, which are still pending. A Tiffany and Co. suit was heard in a New York court in November 2007, and in France, the Conseil des Ventes, a group which represents French auctioneers, has also sued recently, claiming that eBay has manipulated its assertion of being a broker in order to avoid falling under laws which govern the auction sector.