By Henry Samuel in Paris
Last Updated: 9:32PM BST 30/06/2008

The internet auctioneer eBay was ordered today to pay almost €40 million (￡31 million) to luxury goods companies including Louis Vuitton and Christian Dior for allowing fake copies of their products be sold via its website.

 

LVMH had accused eBay of knowingly letting people sell fakes A court in Paris found that eBay had committed "serious errors" and awarded damages to the two companies owned by the LVMH group of €19.3 million and €16.3 million respectively.

 

It also ordered eBay to pay more than €3.25 million to four perfume brands – Christian Dior, Kenzo, Givenchy and Guerlain – for "illicit sales" of their products, as these should only be sold through specialist dealers.

 

The court banned eBay from "broadcasting adverts of perfume or cosmetic goods" of these brands or those "presented as such".

 

LVMH had accused eBay of knowingly letting people use its site to sell fake bags, lipstick, perfume and clothes.

 

LVMH hailed the decision as a major victory against illegal sales on the Internet.

 

"It is a major first, because of the principles that it recognizes and the amount sought," said an aide to LVMH's president, Bernard Arnault.

 

Describing eBay's anti-counterfeit measures as "empty", the spokesman said the ruling was "important for the creative industry" and that it "protected brands by considering them an important part of French heritage."Sravanthi Agrawal, a spokesman for eBay Europe, said: "If counterfeits appear on our sites we take them down swiftly, but today's ruling is not about our fight against counterfeit; today's ruling is about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers everyday.

 

"We will fight this ruling on their behalf; we will be seeking leave to appeal."

The verdict is the latest blow to the online giant. Earlier this month, it was ordered to pay €20,000 in damages to the French company Hermes for selling counterfeit goods. The court ruling, a first in France, found eBay directly

responsible for the sale on its website of three Hermes bags, including two fakes, for a total of €3,000.

 

France's traditional auctioneers took legal action against the online auctioneer in December, on charges of encouraging trade in pirated and stolen goods.

 

The council representing the auction industry also accuses the internet trader of breaking an eight-year old French law that requires all auctioneers to be approved by the state.

 

Last September, the cosmetics giant L'Oréal launched legal action against eBay in five European countries including France, over the sale of bottles of counterfeit perfume.