French Courts Continue To Penalize eBay For Actions Of Users

from the bad-news dept

Mon, Nov 30th 2009 4:45pm — Mike Masnick

While more and more courts seem to be understanding that eBay shouldn't be responsible for what users are selling on its site, it appears that French courts are a bit confused. Last year, a French court fined eBay $63 million because counterfeit LVMH products were being sold on the site. Of course, eBay has no way of knowing what's legit and what's not, but the French court didn't seem to care. A similar case, also involving LVMH, but concerning Google ads, was also ruled in LVMH's favor, but it was appealed to the European Court of Justice, and a judge there has already indicated that it makes little sense to blame the company. But that isn't stopping the French courts. eBay has now been fined yet again, because of a French ban on selling even legally purchased brands of LVMH perfumes if you're not an authorized distributor. eBay is appealing the ruling, saying that banning the resale of legally purchased goods doesn't make sense and harms consumers. However, a much bigger question is why eBay should be liable at all. It's not eBay doing the selling, but users on the site.

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Filed Under: auctions, fines, france, liability, trademarks, users
Companies: ebay, lvmh

16 Comments

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Brian (profile), 30 Nov 2009 @ 5:29pm

Well the only solution obviously is for all users to ship every item being sold to ebay so they can then inspect it, confirm it is legit and legal, and then approve it for sale.
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Richard (profile), 30 Nov 2009 @ 5:30pm

In response, why doesn't ebay just block France from accessing their site. While they're at it, block Paypal too. If French users are going to cost you $63 million it would probably be financially better to simply not have French users.
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Andrew (profile), 30 Nov 2009 @ 5:50pm

However, a much bigger question is why eBay should be liable at all. It's not eBay doing the selling, but users on the site.

My understanding is that brand owners within the EU are allowed to use trademark law to control the channels through which their products are sold. LVMH apparently does not allow its products to be sold in supermarkets or other discount shops, limiting sales to boutiques that are more in line with the brand image they wish to project. Here, they are trying to do the same to stop eBay selling cheap stuff.

A related case from 2002 is the European Court of Justice's ruling against Tesco (a UK supermarket) for importing grey market Levi jeans and selling them cheaply.

At least I think that's right. My knowledge of EU trademark law is extremely limited.
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logicologist (profile), 30 Nov 2009 @ 7:36pm

ebay in France
If the situation was taking place on ebay.com then they wouldn't have much authority. They could ban ebay.com from the French market but not much else. It is ebay.fr that is in question. (my thoughts)

France is jealous of anything American and of prominence. So the story is not surprising.

I used the 'gray market' for several years in the computer industry. It simply is a result of price breaks given by a manufacture to companies that buy in bulk. To shut this market down would damage or end this pricing practice which is not democratic. Can you imagine Airbus not being able to give price breaks to British Airways to help entice larger orders?

"Here, they are trying to do the same to stop eBay selling cheap stuff." ... ebay sells nothing. You even cut-n-pasted that as explained in the article. ?? Users of their site do the selling. The "related case" is not relevant.

The case will be overturned and I think ebay should make a stink and shut down ebay.fr and see if the French government feels a backlash? Show them that they can play games too.
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Marco, 30 Nov 2009 @ 8:19pm

What's their model?
I've never bought or sold anything on ebay, but doesn't ebay get a cut of each sale? That's how it works right? If they do then I would have to say they should be liable. Ignorance is no excuse.
Unless it's pay to post an item. Then I would say they shouldn't. If someone could clarify for me.
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Sam, 30 Nov 2009 @ 9:33pm

Re: What's their model?
Marco, as far as I am aware, eBay do NOT take a cut of any sales. They are simply the "middle man" of the sale. After you win an auction you must contact the seller directly and then discuss postage etc. Most of the time the buyer must pay for the postage, in rare occasions p/h is covered by the seller
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Mark, 30 Nov 2009 @ 10:07pm

Re: Re: What's their model?
Nope. There is an insertion fee for listing an auction on ebay, which is based on the starting price of the item. There is also an additional fee, payable when the auction is over, that is based on how much the item actually sold for at the end of the auction. The latter fee is not charged if the item did not sell.

However, the fact that they are trying to fine ebay for this is only punishing ebay for other people's choice to sell stuff that they have. It's stupid.
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Pjerky (profile), 30 Nov 2009 @ 10:52pm

Hate Ebay
OK, so I personally hate eBay and PayPal (owned by eBay) for their ever more aggressive anti-consumer actions that stifle legitimate sellers and buyers in return for more crap volume, but I have to agree with Mike on this.

This is like suing Cisco for building routers that may or may not end up transmitting pirated software across the internet in their given lifespans. Or suing rubber makers for supplying the rubber used to make the tires on the vehicles that are used to smuggle drugs.

But then again isn't that true of many of these new attacks by copyright holders?
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PaulT (profile), 1 Dec 2009 @ 2:07am

Re:
Pretty much, I think. Hong Kong importer Lik Sang was shut down under copyright/trademark law for daring to offer people PSPs before their official UK launch, and online retailer CD-WOW was heavily fined for importing legally produced CDs from the Far East to allow them to sell albums at a reasonable price.

Not sure if there's been many similar cases in the wider EU, but those UK cases were the thing that made it clear to me how anti-consumer industry can really be.
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Ryan Diederich, 1 Dec 2009 @ 3:30am

Hate them both also...
Having used eBay and Paypal as my income at age 14-16, i hate them too. They take a HUGE cut, it is something like 0-2 dollars to list item, depending on price, then 2%, then another 2% if it is over $100, then another 2% if it is over $500, then paypal takes 3%. It really adds up. My costs for selling a $300 item were $30.

Nonetheless, it is never ebays fault. If our democratic free nation websites had to follow every foreign policy, we would have a pretty shitty internet. Maybe this perfume company should lower its disgustingly high prices.

There is no such thing as an Axe deodorant conterfeit, because its only 3 bucks a can.
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Anonymous Coward, 1 Dec 2009 @ 7:07am

Re: Hate Ebay
Ebay in some ways has created it's own hell. With a quality assurance team and the fact that they often remove fraudulent or misleading auctions before completion, they have clearly indicated that they are aware of what is being sold on their site. Apparently Ebay has someone eye inspect every auction sometime during it's listing period.

Combine this with ebay profiting from the sale (unlike, say, Craigslist), and you end up in a situation where it is easy to show that Ebay is aware of what is on their site, and profits from the sale of grey market / black market goods.

Ebay isn't just a listing site, it's a partner in your sale. They profit from you getting the highest price, the higher the price, the more they profit.

Unlike Cisco, your example, Ebay is well aware of everything on their site, checks all listings, and profits from the use. If Cisco was giving preferential passage to P2P traffic for a price, and inspecting it to make sure that was no (example) kid porn in there, then they would also come more liable for all of the content.

Ebay isn't a "230!" entity, they are a sales partner, which is a very different game.
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Nathan Belsun, 1 Dec 2009 @ 3:16pm

eBay, don't go away
LMVH's stuff isn't even good...

eBay is like an electronic community board where you can pin up your item, and it's a bidding system. They can get some money if you want to really spruce up your item and put bells and whistles on it.

Are there any counterfeit bag sellers on the streets of France? I didn't see any, but I guess they don't have 63 million Euros to offer.

eBay should auction off the fine to the highest bidder. If someone can buy a red paperclip on eBay, why not their own fine? They could even pay it off, sorta. Wikipedia's asking for 7 million dollars from people, why not eBay?

Oh, and CD WOW changed hands a couple years back. They're safe to use now. Although if they start selling LMVH bags...HAHA!
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Jackie, 13 Jan 2010 @ 8:01am

Fines
You think ebay getting fined is bad enough I had an item sent to my holiday home in France a one off purchase which turned out to be fake goods and now I personally am being sued by the manufacturers for this. So far it has cost me 1750 Euros in legal fees and I have been told this could drag on for up to 2 years.
I have been treated like a criminal the customs retained the item the police searched my holiday home and then the company who own the real goods want me to pay about 40,000 euros. This is a nightmare.
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ebay selling tips, 17 Feb 2010 @ 8:35am

eBay
Theres no suprise there. Sounds fammilar to the recent louis vuitton case.
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catalyst, 16 Apr 2010 @ 5:42pm

Join Sellers Contacting ABCs 20/20!
Greetings all,

My name is April. I am knottybynature-ny, "no longer a registered user" on eBay. Due to the fact that I had the nerve to state my opinion openly, as guaranteed by the American Free Speech Amendment, I was first censored, then suspended from their site.

Many of us are more than frustrated with the blatantly buyer-skewed feedback system, the FB extortion or manipulation that goes on ignored; continuous removal of posts-what only eBay feels to be 'a serious threat to the security of the site'. What they removed of mine, were nothing more than a list of policy changes I had come up with on the FB, along with a request to sellers to contact Chris Cuomo at the US 20/20 show. I strongly believe that there are unfair and possibly unethical business practices on eBay. My goal is to get the media attention we need to have eBay investigated and stopped. Since theirs is an online venue, and spans the globe, I am bringing my story to you. I hope you too have the courage to stand up against discriminatory treatment by a large company. Let's end this together!

I hope you will visit the following US forum where I am encouraging all sellers to not only contact 20/20, but your local paper or major metro with letters & links on how others can participate. Please, pass it on to everyone you know. I'm sure there are many former eBayers who are not on this forum but would like to know.

I am a firm believer that if we work together, we can change eBay back to the fun venue it used to be. Please see me on Power Sellers Unite:

View topic - Join Sellers Contacting ABCs 20/20

Just a note-I will only be posting on the PSU site as I do have a life outside of this LOL. Thanks for your support. Please contact me there~
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In_Correct (profile), 19 Oct 2010 @ 7:41pm

This applies to SHAVERS also:
I like to get portable shavers. I use the rechargeable batteries. One type of Shaver I use is Lightspeed Clio. The screen wears out after one year and needs to be replaced. It probably can be replaced by any universal spare parts screen, but whenever I find a deal on a lightspeed clio, it is simpler for the moment to buy another lightspeed clio shaver. I bought a replacement last year for around $12.00 USD including shipping. This year I found an including shipping price of around $15.00 USD for two new shavers. This price includes both shavers. I could not buy it because of France and their perfumes. Does a shaver look like a perfume?! Previously I tried to buy Centrum Vitamins on Ebay. I could not because of France. So it looks like it affects any and all items that are "health & beauty" related. What needs to happen instead of France sueing Ebay is that Ebay and its sellers needs to sue France!! And everybody else should boycott the France perfumes!! The shaver was made in China and was already in U.S.A. and sold by a U.S.A. seller!!!! NOTHING to do with France!!
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