Ruling threatens resales on eBay

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TEXT OF STORY

Bob Moon: The world's biggest online auctioneer, eBay, is being told to cough up a lot of French bread.

The damages awarded by a court in Paris today amount to around $63 million and the ruling could make it harder to find a knock off of a $1,500 Louis Vuitton handbag.

The world's largest luxury-goods maker LVMH successfully sued to stop the sale of such fakes. A similar case by Tiffany's here in the U.S. is expected to be decided any day now.

As Marketplace's Jill Barshay reports, eBay could soon find itself having to police everyone who wants to sell branded goods on its site.


Jill Barshay: Louis Vuitton claimed 90 percent of the items carrying its brands on eBay are fake. Tiffany says online sales of counterfeit goods cost manufactures about $30 billion dollars a year.

Susan Scafidi teaches fashion law at Fordham University. She says counterfeiters are hard to catch, so brands are now going after third parties.

Susan Scafidi: Tiffany's argument, LVMH's argument is essentially that eBay is a landlord and knows that illegal activity is going on on the website and isn't stopping it and that eBay is directly profiting from that illegal activity because eBay gets a percentage of every sale, real or fake.

eBay says it spends more than $20 million a year removing counterfeits from its website. It also encourages trademark and copyright holders to report infringements.

Patti Freeman Evans studies online commerce at Jupiter Research. She says if eBay loses its appeals in France and the Tiffany's suit here, it's going to have to do a lot more.

Patti Freeman Evans: What may happen is that eBay will have to put in place regulations for their sellers, so if you want to list the following brands, you must provide us with either an official statement that you are an authorized seller or actual serial numbers of the products.

Freeman Evans says these kinds of rules could end up making it difficult for the rest of us to sell used designer goods, like that Louis Vuitton bag you don't want anymore. And it won't be good for eBay either. The company says a significant chunk of its business is secondary sales.

In New York, I'm Jill Barshay for Marketplace.

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