French Court sucks blood out of eBay (and Open Markets)
BBC just ran a story on a court ruling in France which basically states that the French luxury goods manufacturer LVMH will receive 40m EUR in damages from eBay over eBay’s lack in preventing counterfeits from LVMH brands such as Louis Vuitton, Christian Dior and Givenchy being sold on the site.
It’s certainly arguable if eBay is doing enough to protect companies from the illegal sale of counterfeits on their site - especially given the fact that eBay does generate revenue on the back of such transactions. The much, much more interesting point is this:
Four perfume brands - Dior, Guerlain, Kenzo and Givenchy - sued for what they called “illicit sales” of their products.
They alleged that even auctions involving their legitimate perfumes were illegal, because only specialist dealers were permitted to sell them.
The court barred eBay from selling the four perfumes in future.
“The court barred eBay from selling the four perfumes in the future.” - Sorry? What was that? A court rules that eBay is not allowed to allow certain brands to be sold on its marketplace? Sorry guys - but the ruling judge a) clearly didn’t understand what eBay actually does (they are a marketplace - not a retailer!), b) obviously doesn’t give a hoo about open markets - how can you ban someone from his right to resell a good which he purchased?
This ruling means that if I rightfully purchased a bottle of Dior perfume I am not allowed to sell it on eBay. Sorry guys, but this is insane! It will be interesting how this ruling stands in the light of European law - eBay announced that they will fight this case.
** Annotation **
Julia Kirby at Harvard Business Publishing posted a blog post titled “Is Suing eBay the Best Way to Fight Counterfeiting?” - great points about the counterfeit case. Go, read it! 