Ouch… a Paris Court ordered eBay to pay $63 million in damages to Louis Vuitton for negligence in allowing the sales of counterfeit Louis Vuitton on the website.  (Read more about it here…)

You have to hand it to Louis Vuitton.  They got the job done.  They single handedly lit a fire under the figurative backside of eBay Inc, and got them to do what needed so much to be done… to clean up the marketplace.

The court decision makes so much sense to me… and obviously eBay is appealing, but the fake situation on eBay was SO bad for SO long… it’s not shocking that the courts would lay down a heavy hand.

Let’s face it.  eBay has made a lot, and I mean a LOT of money on the sale of counterfeit goods on their site.  (I’m estimating on average eBay sells about 16,000 Louis Vuitton items a month at an average sales price of $375 with average start prices of $175.  That makes the average fee for Louis Vuitton items at about $17.  Multiply that times 192,000 items a year… and we’re looking at $3.8 million in fees annually for the LV brand alone.  LV’s claim of 90% fake on eBay was probably about right until the big overhaul in fall 2006… so you do the math.)

I mean, we (putting myself with the collective community of online shoppers to whom authenticity absolutely essential) had been almost badgering eBay for years and years to do something… and yet the situation on eBay just literally got worse and worse. The countless fakes, the one day auctions, the zero feedback seller with 50 NWT LV listings, the fake second chance offers, the $75 BINs for $1000 bags.  I mean, now we ask where all the buyers have gone?

They said that nothing more could be done- they were doing all they could, they’re just a venue, yada, yada, yada.  A few years ago, I could go through a whole page of Louis Vuitton listings on eBay and literally not find a single authentic bag.

That is not the situation now.  The vast majority of Louis Vuitton listings on eBay today are authentic.

So if eBay was just a venue, and was doing all they could do… what happened?

Tiffany & Co and Louis Vuitton sued.  eBay woke up.  They turned on the lights, swept the place out, cleaned the place up, batten down the hatches and locked the doors.

It was hard for all of us to adjust at first, but eBay has taken the right first steps to improve the atmosphere and the trust level that we all needed in a platform to be able to sell authentic luxury goods online.

eBay now monitors closely brands that are frequently counterfeited.  There are restrictions on how long you have to be selling on the site to list those brands, and how many you can list at once.  There is particular wording watched for that gives red flags that a listing may be fraudulent.  Brands that are watched don’t get listed immediatley, but go through and overview process for up to 10 hours before they hit the site.

eBay has come a long way, baby!

So I’m fine with the damages awarded by the Parisian Court…

What is frightening part to me:

Part of that ruling includes payment of 3.25 million Euros to Christian Dior, Givenchy, Kenzo and Guerlain for allowing perfume to be sold outside of the “authorized network”.

The result of this part of the decision is that eBay is completely barred from listing these cosmetic and perfume brands on its site PERIOD.

eBay’s “official response”:

“Today’s ruling is not about our fight against counterfeits; today’s ruling is about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that EBay empowers everyday,” EBay said in an e-mailed statement. “We will fight this ruling on their behalf.”

Yipes?  So I get J’adore Dior perfume for my birthday and never use it (which I did, and I don’t… it’s just not my favorite).  I now can’t list it on eBay because I am not a member of the authorized distribution network for Christian Dior?

Hmmm… got to get back to you when I look into this more.

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The Louis Vuitton v. eBay decision that is.  It should be here on the 30th- tomorrow that is.

Are you ready?

After that amazing Candadian decision- $1 million for a fairly small fashion store (with only a couple locations)… and the $30,000 eBay had to pay Hermes last month after a decision against them in a French court for allowing 3 (yes, three) fake Hermes on the site…  I’m DYING to hear what the French Courts are going to say in the Louis Vuitton lawsuit against eBay Inc.

Louis Vuitton, et al, is seeking 51 million Euro ($80 MILLION) in damages for negligence and the illicit sales of counterfeit bags on their site.

(As an aside- as someone who’s been on eBay since 1999, I will say that eBay has done a pretty good job in the last couple years at getting, I’d estimate 95% LESS fake Louis Vuitton listed on the site than they did years ago…

There was a day when the vast, vast majority of the Louis Vuitton bags listed on the site were fake.  Now, the opposite is true.)

This is the part that scares me…

Part of the decision will answer perfume brands Dior, Guerlain, Givenchy and Kenzo who have an issue with eBay even when they allow AUTHENTIC goods to be listed.  They claim that even this is illegal because these companies hold tight control on their distribution chains and ONLY permit specialist, authorized dealers to sell their goods.

I can’t wait…

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