Pia Sarkar
SAN FRANCISCO -- A court ruling against eBay(EBAY Quote - Cramer on EBAY - Stock Picks) may force it to take more of a hands-on approach when it comes to monitoring counterfeit goods on its site -- rather than leaving the task to buyers and sellers.
A French court on Monday ordered the online auction giant to pay $63.2 million to compensate designers for allowing the sale of knock-offs on its site. Louis Vuitton, which filed the lawsuit almost two years ago, was awarded 19.3 million euros, or $30.5 million in damages. The court also barred eBay from selling perfume by Christian Dior, Kenzo, Givenchy and Guerlain, threatening it with a fine of 50,000 euros, or $79,000, a day. eBay said Monday that it will appeal the decision. "It is clear that eBay has become a focal point for certain brand owners' desire to exact ever greater control over e-commerce," the company said in a statement. "We view these decisions as a step backwards for the consumers and businesses whom we empower everyday." The company said it invests $20 million each year to fight counterfeits on its site, and also partners with over 18,000 brand owners to identify fakes. Last year, eBay removed 2.2 million potentially counterfeit listings and suspended about 50,000 sellers. But that may not be enough to satisfy manufacturers frustrated by the prevalence of knock-offs. Some may even feel emboldened by Monday's court ruling to pursue lawsuits of their own. "Once a precedent is set, it could go beyond luxury goods," says Jeffrey Lindsay, an analyst for Sanford Bernstein.
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