eBay Found Guilty of Counterfeit Auctions, Forced to Pay $63 million

By June 30, 2008

The French court, Tribunal de Commerce of Paris, has ruled that auction site eBay Inc. (EBAY) must pay a fine of almost 40 million euros for allowing the auction of imposter merchandise of Louis Vuitton and its family of expensive brands. The world's largest online auctioneer was found guilty of knowingly auctioning off fake goods from Louis Vuitton (LVMHF) and its sister company Christian Dior Couture for violating the distribution network set up for four perfume brands: Christian Dior, Givenchy, Guerlain, and


The court claims the auctions are in direct violation of copyright laws meant to protect companies from the illegal sale of fraudulent merchandise. The monetary damages reflect the business and moral violations eBay committed.

The Tribunal de Commerce of Paris is ordering eBay to pay almost 40 million euros (U.S. $63 million) to the six plaintiffs in the lawsuit. LVMH Malettier, known for its luxury handbags and leather merchandise, will receive 19.28 million euros while Christian Dior Couture will receive over 16 million euros.

The perfume brands will receive more than 3 million euros in damages.

LVMH was seeking nearly 50 million euros in damages, but hails the ruling of slightly less than the desired figure just as significant because of its future implication.

The ruling comes a year and a half after the case began, whereby LVMH filed a cease and desist order against eBay, barring it from continuing the auctions and forcing it to take down ads for the perfume brands.

As part of the ruling, eBay must post the full text of the court's ruling on its Web site for all users to see, further curbing the sales and auction of counterfeit merchandise.

Three weeks ago, eBay was convicted in France of a similar charge against handbag company Hermes for a total of 20,000 euros in damages.


eBay Inc. press release regarding the ruling.

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