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July 2008

A French court decision will force Ebay to pay approximately $63 million in damages to six LVMH-owned brands, because it allegedly allowed the sell of counterfeit goods.

The court ordered the online auction site to pay 19.28 million euros to Louis Vuitton Malletier and 16.3 million euros to Christian Dior Couture as damages for the sale of counterfeit products, Thomson Financial reports. In addition, eBay was told to pay 3.25 million euros to four perfume brands—Christian Dior, Kenzo, Givenchy and Guerlain—for infringing on the brand’s selective distribution network.

The court also said it would fine eBay 50,000 euros a day if it failed to stop advertising the sale of the perfume brands, plus another 50,000 euros a day if it did not prevent its members from featuring the brands in their announcements.

Analysts said losing the case does not bode well for ebay, which is also being sued by famed jewelry retailer Tiffany in the United States for allegedly carrying counterfeit merchandise that is marked “Tiffany.”

An eBay spokeswoman told Agence France-Presse that the company will immediately appeal the decision.

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