EBay Fined €1.7 Million in France in Luxury Goods Case

European officials and lawmakers don't really like big US companies, though most often than not their actions are justified. eBay has now been ordered to pay a €1.7 million fine for allegedly failing to prevent its users from selling products from the luxury goods manufacturer Moët Hennessy Louis Vuitton (LVMH) in France, something it was forced to do after a previous legal battle. The auctions giant will fight the decision which it claims that the fine is grossly exaggerated and that for the most part it complied with the injunction.

“Today's outcome hurts consumers by preventing them from buying and selling authentic items online. The injunction is an abuse of 'selective distribution'. It effectively enforces restrictive distribution contracts, which is anti-competitive,” Alex von Schirmeister, eBay general manager in France, said. "We believe that the higher courts will overturn this ruling and ensure that eCommerce companies such as eBay will continue to provide a platform for buyers and sellers to trade authentic goods."

The court's decision is part of a longer case in which eBay was accused of failing to do enough to prevent the sale of counterfeit products on its site. In June 2008, a French court ordered the company to pay almost €40 million to a couple of luxury goods manufacturers for the transgression. The court also blocked the company from selling any genuine LVMH products in France.

It is for this latter injunction that eBay has now been fined as some 1,300 LVMH products are said to have been listed on the site since the initial ruling. The company has implemented filters to prevent French users from seeing these listings and will now fight the decision. "The fine itself is disproportionate given that eBay complied with the Injunction. It is out of step with our legal victories in France, UK, Germany, Belgium and the U.S.," Schirmeister added.