French court fines Ebay over fake goods

Ebay has been fined nearly £31m by a French court for not doing enough to stop counterfeit goods being sold on its site.

But the online auction site has said the legal wrangle is less about counterfeit goods and more about manufacturers protecting their sales channels.

The online auction site has been ordered to pay more than £15m to Louis Vuitton Malletier and more than £12m to Christian Dior Couture, both brands owned by the LVMH group.

Ebay was ordered to block sales through its site of genuine bottles of perfume made by Christian Dior, Guerlain, Givenchy and Kenzo – four LVMH brands.

In addition it was fined £2.5m for breaching selective distribution network agreements. LVMH uses these agreements to control where and how the perfume is sold.

The company is also waiting for a verdict in a similar lawsuit in the US brought by Tiffany.

Although Ebay said it intended to appeal both rulings, if it loses it could have huge implications for what can be legitimately sold on its site.

It said the French ruling was not so much about counterfeit goods but introducing what it sees as unfair commercial practices. It pointed out that it spends more than £10m annually and employs over 2,000 people on a daily basis to combat counterfeit products.

In a statement Ebay said: “If counterfeits appear on our sites we take them down swiftly, but [this] ruling is not about our fight against counterfeit; it 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 every day.

“We believe that the overreach manifests itself through an attempt to impose, in France, a business model that restricts consumer choice through an anti-competitive business practice.”