eBay Vows to Fight Following Overreach by LVMH

By: Richard Brewer-Hay

Earlier today, the Tribunal de Commerce in Paris, France ordered eBay to pay 38.6 million euros ($61 million) in damages to the French luxury goods company Louis Vuitton (LVMH), regarding the sale of counterfeits online.

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The ruling stems from a lawsuit filed by LVMH back in the Fall of 2006. Since that time eBay has invested tens of millions of euros in stopping counterfeit goods appearing on the site. In 2007 eBay suspended approximately 50,000 sellers. eBay also blocked 40,000 previously suspended sellers from coming back.

That said, LVMH is claiming that 90% of LVMH goods sold on eBay are fakes. I’d like to see how this number is arrived at, given the extent to which eBay has invested in combatting this problem.

eBay is pointing out that the ruling actually goes well beyond the battle of counterfeits on the site and argues that this decision could, in effect, eliminate legitimate competition in the marketplace should it hold up.

eBay Inc issued the following statement:
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 believe that this ruling represents a loss not only for us but for consumers and small businesses selling online, therefore we will appeal. It is clear that eBay has become a focal point for certain brand owners’ desire to exact ever greater control over e-commerce. We view these decisions as a step backwards for the consumers and businesses whom we empower everyday.

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.

The ruling also seeks to impact the sale of second-hand goods as well as new genuine products, effectively reaching into homes and rolling back the clock on the Internet and liberty it has created. 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 does more and more to combat counterfeit. We invest more than $20 million each year to ensure counterfeit goods are found and removed. We partner with over 18,000 brand owners around the world to identify and successfully remove counterfeit goods and employ over 2,000 people to carry out this fight on a daily basis. When we find counterfeit goods on our sites we take it down.

Overzealous enforcement of restrictive sales practices are anti-competitive and give consumers a bad deal. This is recognised by European Union policy-makers who are seeking to create a better framework for online sales to promote e-commerce in Europe. We support a free and fair market in Europe and the benefits this will bring for our sellers.

eBay will continue to fight against counterfeit and continue to fight for consumer value through the promotion of e-commerce.

For more information on how eBay currently protects intellectual property, visit the Verified Rights Owner (VeRO) Program site.

Cheers,
RBH