Knock-off Knockout

LVMH just got 80,000 euros richer because of eBay—and no, this isn’t sales revenue we’re talking about.

A French court ordered eBay to pay the French conglomerate the aforementioned amount as compensation for several acts of counterfeiting. On top of this, the online auction site was barred from selling 4 LVMH perfumes namely, Christian Dior, Kenzo, Givenchy and Guerlain and was ordered to pay 1,000 euros for any subsequent infraction.

The French courts have previously ordered eBay to pay LVMH $63 million and Hermes, $30,000, in damages for the sale of counterfeit luxury goods and the illegal sale of authentic luxury perfumes and cosmetics. In the LVMH case, the court ruled that eBay had been negligent in preventing the trade in counterfeit luxury goods on its site, while in the Hermes case, it was held that, by receiving commissions, eBay was a direct participant in the sale of the counterfeit goods. In the US, jewelry company Tiffany’s wasn’t as successful against eBay. The court held that, “Given Tiffany’s choice to sue eBay, rather than individual sellers, and this Court’s conclusion that eBay does not continue to supply its services to those whom it knows or has reason to know are infringing Tiffany’s trademarks, Tiffany’s claims against eBay must fail.”

Considering the number of product listings, how much time and money would it take to police the activities of eBay sellers and check the genuineness of the goods posted for bidding? Should eBay be held liable even though it states in the terms of use that counterfeit goods are not allowed to be sold in its websites? By analogy, can a company sue a city government for running a public market wherein counterfeit items are sold? eBay is just that after all, a marketplace for all kinds of goods.