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eBay Must Pay $63M Damages for Unauthorized Sales of Luxe Goods

Posted Jun 30, 2008 11:24 AM CDT
By Martha Neil

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For the second time in a month, a French court has held Internet auction site eBay Inc. liable for helping to facilitate the sale of luxury goods outside of authorized outlets.

This time, a judge awarded $63 million in damages, after finding that eBay had failed to take the necessary measures to prevent individual sellers from offering fake Louis Vuitton products and real designer perfumes that were not supposed to be sold except by authorized dealers, according to the Wall Street Journal.

A representative of the winning plaintiffs, LVMH Moët Hennessy Louis Vuitton and its sister company, Christian Dior SA, proclaimed the ruling a major courtroom victory, not only because of the money involved but because of the precedent it sets. By holding an Internet auction site liable for the activities of its users, the verdict is likely to encourage eBay and other such sites to monitor user activities more carefully, according to the newspaper.

Earlier in June, in the first such ruling in the country, another French court also found eBay liable for facilitating the sale of fake Hermès International SCA products, the newspaper says. Although the amount of damages was much less, the case nonetheless set important precedent, according to intellectual property attorneys.

"We will fight all these decisions in the name of eBay users, and we have decided to appeal," eBay says in a statement today, reports Forbes. "If counterfeit goods are put up for sale on our site, we scrap them as soon as possible."

Additional coverage:

Bloomberg: "EBay Is Ordered to Pay $63 Million in LVMH Lawsuit"

New York Times: "EBay to Pay Damages in Sale of Fakes"


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