has posted a letter to its 14m UK users detailing its fight against counterfeits and claiming it is a defender of e-commerce against the threat of uncompetitive commercial practices.
The letter, signed by ‘Doug’ (European SVP Doug McCallum), follows a ruling last week against eBay in the Paris commercial court.
It was ordered to pay £31m to luxury goods group LVMH for allowing the sale of fake designer goods on its website, and a further £2.5m for unauthorised sales of genuine perfume brands, which LVMH controls through exclusive distribution. Doug signs off with a defiant:
“We are appealing the ruling in France”.
More on the legal ramifications later, but first the PR battle. As well as winning the court case, LVMH won all the newspaper headlines. There must be women in France who spend a fortune on designer labels, in part because they can turn their cast-offs into cash on eBay, but eBay was unable to wheel out any fans last week.
Nor did eBay sow the idea that LVMH’s iconic Louis Vuitton handbag is more Hollywood than haute couture and that its court case is as much about protecting Victoria Beckham as it is about protecting the national heritage of France.
There’s an element of double standards in LVMH’s case. It gains massive free publicity online from the illegal copying of images of celebrities with handbags by blogs.
News organisations that pay for the images are left to request that ‘you report stolen images, please, if you see them’. Does LVMH want fake photos removed from the internet, or just fake handbags?
eBay also made the mistake of going into its PR battle with LVMH without a tie. Its media centre does not have a picture of eBay inc. President and CEO John Donahoe in a shirt and tie. (Doug McCallum appears on Flickr in a t-shirt, in front of a what looks like a disco wall).
By comparison, LVMH’s Chariman and Chief Executive Bernard Arnault is the best dressed billionaire on the planet. For its next court appearance, eBay’s media centre needs to be dressed as smartly as Peter Mandelson, the European Union’s trade commissioner, who is involved in his own fight with ‘protectionist’ French president Nicolas Sarkozy.
On the legal ramifications, according to London IP lawyer Iain Connor, these could have implications beyond eBay. The online marketplace provides shopfronts for numerous perfume retailers, as does Amazon.
Connor, an intellectual property lawyer with Pinsent Masons, says that exclusive channels of distribution for certain luxury goods are permissable under European law.
“It seems that this ruling has taken that right to what in an offline world would appear to be a logical conclusion but would appear to be an interesting extension into the online world.”
Is Hong Kong-based StrawberryNET on eBay, which sells many of LVMH’s luxury products at discounted price, an approved distributor? Or Escentual with a shopfront on Amazon that currently lists 660 Dior, Givenchy, Guerlain and Kenzo products, all LVMH protected brands?
Etailers of certain brands of baby strollers reported moves to have their businesses shut down last week as a result of the Paris commercial court decision.
The fine for counterfeit goods has wider implications too, says Connor:
“We’ll have to see how the ruling works in practice but it has the potential to catch other websites with inaccurate descriptions of products.”
With around 115m listings at any one time and 6.9m new posts every day, eBay’s vast content pops up everywhere, on thousands of affiliate websites and in search engine results as well as on eBay.
A search on Google Shopping for designer handbags returned results with questionable eBay listings, but a spokesperson for Google’s legal department distances the search giant:
“Google Product Search crawls the web for goods for sale algorithmically. Search engine results reflect the information that site owners have already made available to the public on the Internet.”
Connor, who is paid to protect the interests of companies like LVMH, expects eBay to ringfence eBay.fr with any action it takes and says counterfeiters may avoid listing fake goods on eBay’s French website.
eBay.fr already has the attraction of rifling through the wardrobes of women who have more style than most, and spend more on fashion and beauty in the first place. With less counterfeit, this could make eBay.fr the preferred site to shop for luxury brands, both new and second hand.
Debbie Procter is the founder of Wrappers.