eBay Liable To Hermes For Sale Of Counterfeit Products

As reported previously on The Luxe Chronicles, luxury brands such as Hermes, Dior and Louis Vuitton have adopted a tougher stance against online auction site eBay in recent months and their efforts to hold the auction site accountable for sale of counterfeit products seems to be paying off. The Tribunal de grande instance de Troyes ruled in favor of Hermes in a much anticipated judgement handed down on Wednesday, June 4.

The French court ruled that S.A. Ebay France, Ebay International AG and the individual eBay account holder are collectively liable to Hermes in damages for sale of counterfeit Hermes handbags that took place on the French site. (Source) The underlying facts of the lawsuit involved the sale by an eBay customer of three Hermes bags, two of which turned out to be counterfeit. Hermes successfully argued that eBay is in fact a direct participant in the sale of the counterfeit goods not only because they offer counterfeit traders a platform for their fraudulent transactions but also because eBay provides a number of services designed to enable the transactions to take place. The key argument however was that eBay, by virtue of taking a commission from each sale that takes place on its site, is actually profiting from the counterfeit trade thereby making it a participant in the fraudulent transaction and not merely a passive host as it has contended. As noted by The Luxe Chronicles back in October 2007, Hermes' lawsuit against eBay marked a toughening of the French luxury brand's stance towards the online trading site. Previously, Hermes' policy had been to join suits brought by eBay's disgruntled customers relating to counterfeit Hermes products rather than to sue eBay directly. eBay and the account holder have been ordered to pay Hermes damages in the amount of 20,000 Euros ($31,500 USD). eBay has also been ordered to publish a copy of the judgement on the front page of its French site.

Please remember, purchasing a counterfeit luxury good is not a victimless crime regardless of where the sale takes place. The counterfeit goods trade is linked to organized crime, child labor, human trafficking, terrorism networks and loss of legitimate employment and tax revenue. Caveat emptor.

Sincerely,

The Luxe Chronicles