Online auction site eBay has accused the French courts of “hurting consumers” and has dubbed a €1.7m fine “disproportionate” after losing a case against luxury goods group LVMH.
eBay was fined by the Commercial Court of Paris following an injunction issued in June 2008 that prevents French eBay users from buying or selling LVMH Group perfumes and cosmetics on any eBay website.
To comply with the injunction, eBay said that it used state of the art software to check millions of daily listings, with thousands of listings of authentic items rendered invisible and inaccessible to French eBay users.
In its court submission, LVMH provided detailed information on 1,341 listings but eBay said that it contains 200 million listings every day and believes that those cited were posted by people who set out to deliberately circumvent the rules.
The online platform claimed that in 81% of the listings put forward by LVMH, the seller did not accurately describe the item being sold, misspelled or used no brand names, or only product pictures.
Alex von Schirmeister, general manager of eBay in France, said: “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.
“We believe that the higher courts will overturn this ruling. The fine itself is disproportionate given that eBay complied with the injunction.”
Appeals hearings in relation to the injunction and two related LVMH cases are scheduled for May 2010.