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Perfume costs EBay $2.5 million in France

November 30, 2009 |  5:53 pm


Christian Dior Poison by Dior Credit: Christian Dior Fragrances.

Online auction giant EBay Inc. was slapped with a $2.5-million fine by a Paris court today for failing to meet the terms of an earlier ruling, which prevented sales of certain perfume brands to French consumers on its website.

The Commercial Court of Paris found that EBay violated a June 2008 order to halt sales of Moet Hennessy Louis Vuitton perfumes. The company, known as LVMH, sells a variety of popular perfume brands, including Christian Dior, Guerlain, Kenzo and Givenchy.

Mary Huser, EBay’s deputy general counsel, said the company poured millions of dollars into filtering software to check millions of daily listings to ensure that it acted in accordance with the injunction.

“It is extraordinarily difficult, if not impossible, for the French consumer to purchase these products because of the money and technology that EBay put into place,” Huser said. “We didn’t agree with the decision to implement the injunction. But we did everything to meet the terms.”

EBay said there are 200 million listings on its website every day and claimed that LVMH offered only 1,341 detailed examples in its case. And in 1,091 of those 1,341 listings, EBay said, the seller didn’t use brand names, misspelled the names or used only pictures to describe the product. EBay said those listings were posted by people who deliberately sought to sneak past the filters.

“The fine itself is disproportionate given that EBay complied with the injunction,” Alex von Schirmeister, general manager of EBay in France, said in a statement. “It is out of step with our legal victories in France, U.K., Germany, Belgium and the U.S.”

The 2008 injunction relates to “selective distribution,” a practice in which manufacturers control how their products are sold. LVMH’s argument is that online retailers degrade their product’s image.

Paris-based LVMH said the court’s decision "constitutes an important step in the fight against unlawful practices."

EBay plans to appeal the verdict. The case will be heard next year.

Separately, EBay has been fighting off luxury goods and cosmetics manufacturers in courtrooms across the globe over sales of counterfeit products.

In May, EBay won its battles with L’Oreal in French and British courts, finding that the company had met its obligations to combat fake products. In February, EBay scored a victory in Germany against the Rolex Group over the sale of counterfeit watches. In July 2008, the company won in a dispute with Tiffany & Co. over the sale of counterfeit goods.

-- W.J. Hennigan