eBay and LVMH: Latest French Court Order
eBay was ordered by the French courts on 30 November to pay Louis Vuitton owner, LVMH, 1.7m euros for failing to prevent the sale of LVMH products on its web site.
The latest ‘fine’ for eBay’s failure to prevent sales barred by court order arises from action to enforce the court order of July 2008 which prohibited the sale or purchase of any LVMH products on eBay, irrespective of their authenticity. The original order was intended to prevent counterfeit goods being sold on the eBay site. eBay was then ordered to pay nearly 38.6m euros on the basis that its attempts to prevent illegal sales were inadequate (it is reported to be appealing that decision). It was stated at the latest hearing, which resulted from a request by LVMH that a review be carried out into eBay's compliance with the 2008 order, that over 1,000 LVMH products have made their way on to eBay’s site since the injunction was first imposed.
LVMH stated: ‘This decision constitutes an important step in the fight against unlawful practices. Selective distribution ensures the security and quality of products for consumers. It generates numerous jobs and contributes to the ongoing worldwide success of European luxury goods brands.’
Ebay's Europe director Alex Von Schiermeister said that the ruling and behaviour are anti-competitive.
‘The injunction is an abuse of “selective distribution”. It effectively enforces restrictive distribution contracts, which is anti-competitive. We believe that the higher courts will overturn this ruling and ensure that e-commerce companies such as eBay will continue to provide a platform for buyers and sellers to trade authentic goods.’
EBay is reported to have told the court that it believed that the 1,300 listings on which LVMH based its case were traps set for it:
‘To comply with the injunction, eBay used state of the art filtering software to check millions of daily listings, with thousands of listings of authentic items being rendered invisible and inaccessible to French eBay users. In its court submission, LVMH provided detailed information on just 1,341 listings out of 200 million listings that are live on eBay every day. eBay believes that these listings were posted by people who set out to deliberately circumvent the extensive systems that had been put in place.’
Published: 01/12/2009
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