EBay wins Belgian victory over counterfeit sales

Out-Law News | 15 Aug 2008 | 3:17 pm | 2 min. read

A Belgian court has backed eBay in the latest ruling on the auction firm's liability for the sale of counterfeit goods. The Belgian Tribunal de Commerce has rejected claims from cosmetics firm L'Oréal that eBay does not do enough to counter fake sales.

EBay has faced a string of suits from luxury brands in the US, France, Belgium and Germany over its responsibility for sales of counterfeit goods. It recently won a case in the US but lost two in France, whose courts have offered more protection for luxury brands than those of other nations.

EBay does not pre-screen sales of branded items. If a brand owner spots a fake for sale it can notify eBay, which then suspends the sale. L'Oréal, jeweller Tiffany and luxury goods group Louis Vuitton Moet Hennessy (LVMH) have all argued in various courts that this is not good enough, and that eBay is profiting from the sale of fakes and must do more to stop them.

"L'Oréal would like to express its utmost surprise at the result of this decision, which dismissed the action from Lancôme, a subsidiary of the group, against eBay, for the sale of counterfeits on eBay platform," said a spokesman for L'Oréal. "L'Oréal believes the court to be mistaken in its decision to minimise the role of eBay in the sale of products on its platform."

"This is the second successful court ruling in a row for eBay, both supporting our view that controlling prices and distribution reduces consumer choice," said an eBay statement. "The litigation of counterfeits against eBay has been exposed as merely a stalking horse. EBay provides a vibrant and trusted marketplace that gives European consumers a good deal. We work to tackle the menace of counterfeit through action and co-operation with rights owners."

Last month eBay won the US case taken against it by Tiffany, which said that the auction site's anti-counterfeiting actions were inadequate. Tiffany announced this week that it would appeal the ruling.

"The judge's entire analysis of what is Tiffany's responsibility with respect to the site versus eBay's starts from an incorrect basis," said a Tiffany spokesman of the judge in the original case. "The fact of the matter is eBay has created the venue, eBay is profiting from the venue, eBay absolutely controls the venue. It's eBay's obligation, once it has knowledge ... to take the knowledge to investigate and stop the sale of counterfeit merchandise."

Goods producers have had more luck in France. Luxury goods firm LVMH won a €39 million payout from eBay in the French courts earlier this year over the sale of fake goods.

The court found "serious faults" in eBay's processes that led to auctions of counterfeit goods going ahead. It said that by allowing the sales, eBay had damaged the reputation of luxury brands such as Louis Vuitton and Christian Dior.

Earlier this year eBay was also ordered to pay out €20,000 over the sale of fake Hermes handbags.