Landmark Ruling In Favor of Luxury Brands {The 5th Sense in the News}

As a follow-up to yesterday's announcement, eBay has been sentenced to pay a 61.3 million dollars or 38.6 million Euros fine to luxury group LVMH by a French court today. This is a clear signal that the pressure put on the popular auction site has increased. Last month eBay had been asked to pay Louis Vuitton a much more modest indemnity of 20 000 Euros.

According to WWD, this time,

"Louis Vuitton received the lion's share and was awarded 19.3 million euros, or $30.5 million; Christian Dior Couture received 17.4 million euros, or $27.5 million, and Parfums Christian Dior, Parfums Kenzo, Guerlain and Parfums Givenchy, were awarded around 3 million euros, or $4.7 million.

eBay was ordered to stop selling fragrances and cosmetics from those brands immediately, or face a fine of 50,000 euros, or $79,000, a day."....

As of this morning, these brands are still available on both eBay.fr and US eBay.

eBay plans to appeal as they see LVMH's secret agenda as an attempt to crush the competition. LVMH's business practices have eloquently been described along these lines by Dana Thomas in her book Deluxe: How Luxury Lost Its Luster.

According to Forbes,

"The issue, which potentially has important implications for online commerce, has particular resonance in France which has some of the world's biggest luxury goods makers and which has been at the forefront of efforts to fight counterfeit goods. [...]

But the group [eBay], which saw around $60 billion worth of goods sold across its platforms last year, says that as a host for independent vendors, it has only a limited responsibility and capacity to regulate what is sold on its site. The conseil des ventes, the group that represents mainstream French auctioneers, has also sued eBay, which it accuses of trying to circumvent laws regulating the auction sector by claiming to be a broker."

Image: The Fashion Insider