EBay to appeal French ruling
PARIS - EBay Inc. will appeal a French court ruling that restricts the sale of LVMH Moet Hennessy Louis Vuitton SA products, describing the decision as an "anticompetitive overreach."
The court ordered yesterday that eBay pay almost $63 million for Internet sales of counterfeit goods.
LVMH claimed in the Paris lawsuit that the world's biggest Internet auctioneer has a heightened responsibility to prevent fraud and didn't do enough to stop the sale of phony goods on its French site. The ruling also prohibits the sale of LVMH perfumes on eBay.
"It really could set the precedent for others," eBay spokeswoman Nichola Sharpe said. "If we don't put our foot down now and strongly fight it on behalf of consumers' choice, we'd be letting them down. It's an anticompetitive business practice that will restrict consumer choice."
The world's largest luxury goods maker said it found in 2006 that 90 percent of the Louis Vuitton and Dior-labeled perfumes, watches, and handbags on eBay were fakes.
Online sales of counterfeit items cost makers of original products about $30 billion a year, Tiffany & Co. and other retailers claim in a separate US lawsuit.
The precedent may lead to other companies blocking product sales across all Internet marketplaces, and add restrictions on reselling gifts or genuine secondhand goods online, eBay said. The Internet retailer hasn't decided how it will comply pending the appeal, Sharpe said.
EBay, based in San Jose, Calif., fell 28 cents to $27.33 in Nasdaq Stock Market trading.
EBay must pay $30.3 million to leather-goods maker Louis Vuitton, $25.8 million to Christian Dior fashion house, and $5 million to the makers of Christian Dior, Kenzo, Givenchy, and Guerlain perfumes, the court ruled.
EBay must also post the ruling on all its websites in English and French for three weeks and pay to promote it in three publications of LVMH's choice.
Yesterday's award may prompt other lawsuits in France, said Heather McDonald, a New York-based partner at law firm Baker Hostetler LLP, who specializes in intellectual property enforcement litigation.
EBay should treat it as a "call to action" to implement better global controls, she said. 