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EBay loses $63.2 million lawsuit Archived From: Online Auctions

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Big news in the lawsuit between Moet Hennessy Louis Vuitton (LVMH) and eBay. Today in Paris, a French court ruled that eBay was responsible for counterfeit items sold on the site and for selling genuine products outside of authorized channels. The court ordered eBay to pay around 40 million euros, which works out to approximately. $63.2 million. Louis Vuitton was awarded 19.3 million euros, Christian Dior Couture will get 17.4 million euros and Parfums Christian Dior, Parfums Kenzo, Guerlain and Parfums Givenchy is to receive around 3 million euros. The auction website has also been ordered to stop selling fragrances and cosmetics from those brands immediately, or face more fines.

eBay has already said they will appeal the ruling. The case is just one of several against eBay. The company recently lost a battle with Hermes over counterfeit bags. eBay maintains that they remove counterfeit items from the site when they are made aware of them but the brands believe eBay doesn't do a good enough job in policing sellers. eBay has asserted that they are a host in the selling process and therefore not responsible but a statement from LVMH counters that saying that eBay is not a host but is instead a broker for these goods and therefore responsible not just for counterfeits but for the all the branded goods that are sold through eBay. If eBay decides to crack down on sellers this could have a tremendous impact on the way the site, and its users, do business.

 

-Get ready for a fee increase.

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The allure of free handbags for life must have been more tempting to that judge than the plain old briefcase full of cash eBay brought to the table. I don't think this will stick; a search for Hermes in ladies handbags brings up @900 hits.
You have to feel for these designers though. I mean, how is someone supposed to make a living selling $10,000 purses with all of this unfair competition from eBay. What is this World coming to?

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If they lose the appeal, eBay will most likely just institute an outright ban on the listing of those items.
They did that for guns, pets, used panties, and God knows what else, so they'll just add these to the list.
What do they care if a boatload of sellers get put out of business overnight?
That kind of "shoot 'em all, and let God sort 'em out" mentality is right up the eBay corporate alley.

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The judgement was not only regarding counterfeit goods, but selling their genuine goods outside their authorized dealer network. That is such BS and I'm sure that wouldn't fly here.

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Yeah. Like eBay forcing people to use PayPal. Totally wouldn't fly.

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could also effect IOFFER as that is were most of the counterfeiters have flocked to.

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ganda said:The judgement was not only regarding counterfeit goods, but selling their genuine goods outside their authorized dealer network. That is such BS and I'm sure that wouldn't fly here.

why not? Manufacturer has legal power to limit sale/resale of their products only to licensed dealers.

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And disallowing an legitimate alternative to paypal can't happen.. .IE - GoogleCheckout.

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EmptyWallet said:ganda said: Manufacturer has legal power to limit sale/resale of their products only to licensed dealers.

Maybe Debeers should limit resale on diamonds?
Maybe Ford should limit resale on cars?

Come on.... Any item of value will be resold.

I side against eBay on this issue - there were by far too many people selling knock offs of Tiffany items.

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EmptyWallet said:ganda said:The judgement was not only regarding counterfeit goods, but selling their genuine goods outside their authorized dealer network. That is such BS and I'm sure that wouldn't fly here.

why not? Manufacturer has legal power to limit sale/resale of their products only to licensed dealers.

No it doesn't. Once the goods belong to me I can do with them as I wish - burn them, sell them on eBay, whatever - it is MY property.

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Maybe it'd be OK for used ones but not the brand new one.

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locomodem said:[L=Link]


-Get ready for a fee increase.


How is this lawsuit connected with increased fees? I really don't understand your logic. Assuming eBay doesn't appeal, (which they will) $63 million is part of a one-time cost that comes out of earnings and is largely discounted by shareholders as a cost.

Add to that, shareholders have already known about this suit and all pending litigation against eBay. Companies typically set aside money to deal with legal costs and judgments to prevent these from adversely affecting their operations and potentially initiating a cash crunch.[/L]

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madcowdisease said:locomodem said:[L=Link]


-Get ready for a fee increase.



How is this lawsuit connected with increased fees? I really don't understand your logic. Assuming eBay doesn't appeal, (which they will) $63 million is part of a one-time cost that comes out of earnings and is largely discounted by shareholders as a cost.

Add to that, shareholders have already known about this suit and all pending litigation against eBay. Companies typically set aside money to deal with legal costs and judgments to prevent these from adversely affecting their operations and potentially initiating a cash crunch.[/L]

Potentially, it may mean higher fees due to lost sales (lost listing, Final Value Fees, and Paypal Fees). While it is true that shareholders have an understanding of the suit. The shareholder and investor in general has no idea the impact of the lost of listings. So eBay may have to rely on increasing fees in other areas to compensate for the lost revenue. Hence, higher fees.

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The nitwits who redded my post above should google/wiki First Sale Doctrine, read the judgement from France, then tell me what U.S. Law says about that.

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ganda said:EmptyWallet said:ganda said:The judgement was not only regarding counterfeit goods, but selling their genuine goods outside their authorized dealer network. That is such BS and I'm sure that wouldn't fly here.

why not? Manufacturer has legal power to limit sale/resale of their products only to licensed dealers.


No it doesn't. Once the goods belong to me I can do with them as I wish - burn them, sell them on eBay, whatever - it is MY property.

Absolutely agree with you. But while it is legal by law for you to sell these bags, eBay has the right to stop sales of ANYTHING on their site. Heck, if tomorrow their "think tank" of monkeys will decide that all they want to deal with is new merchandise they can close down all listing with the word "USED" in them and there's nothing nobody could do about it. Their site - their rules.

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Perhaps now EVERYONE'S Payola accounts will be put on a 21 day hold have to make up the money somehow.

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ganda said:EmptyWallet said:ganda said:The judgement was not only regarding counterfeit goods, but selling their genuine goods outside their authorized dealer network. That is such BS and I'm sure that wouldn't fly here.

why not? Manufacturer has legal power to limit sale/resale of their products only to licensed dealers.


No it doesn't. Once the goods belong to me I can do with them as I wish - burn them, sell them on eBay, whatever - it is MY property.

This is incorrect. While i am not a lawyer but it has got something to do with division of property rights. A company can limit on what rights it gives to its customers. Most often the company may give you a right to use but not the right to resell (e.g. softwares or Dell computers etc) or rent (e.g. movies). Similarly when you buy a house you may get a right to use the house but not the right to dig on the land or modify the house. If you want you can purchase these rights but they do not come automatically.

Likewise when you buy a car, you may get a right to drive and use the car but not the right to modify the design. Most often the infrigements are small enough that its not worth for the companies to pursue it.

But incase of these overpriced merchandise we are talking about... eh.. overpriced merchandise. They may have some clause somewhere in their contract saying that your buying their stuff means you cannot resell or something.

If someone has an alternate view let me know.

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ganda said:EmptyWallet said:ganda said:The judgement was not only regarding counterfeit goods, but selling their genuine goods outside their authorized dealer network. That is such BS and I'm sure that wouldn't fly here.

why not? Manufacturer has legal power to limit sale/resale of their products only to licensed dealers.


No it doesn't. Once the goods belong to me I can do with them as I wish - burn them, sell them on eBay, whatever - it is MY property.


watssion said:Maybe it'd be OK for used ones but not the brand new one.

Bingo. I'd bet money this lawsuit will stick.

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starcrossed said:ganda said:EmptyWallet said:ganda said:The judgement was not only regarding counterfeit goods, but selling their genuine goods outside their authorized dealer network. That is such BS and I'm sure that wouldn't fly here.

why not? Manufacturer has legal power to limit sale/resale of their products only to licensed dealers.


No it doesn't. Once the goods belong to me I can do with them as I wish - burn them, sell them on eBay, whatever - it is MY property.



But incase of these overpriced merchandise we are talking about... eh.. overpriced merchandise. They may have some clause somewhere in their contract saying that your buying their stuff means you cannot resell or something.

If someone has an alternate view let me know.

Sure will

Have you read the contract you agree to when you buy a Louis Vuitton wallet at Macy's? There isn't one of course. It's a wallet, you bought it, it is now yours to with as you please.

Software is a different case since you *do* agree to a license when you install the product.

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