Unless you’ve been asleep for the last 24 hours, you’ve probably heard that eBay were fined €38million yesterday by a French court, for not doing enough to stop the sale of counterfeit merchandise on their site. Le Monde trumpeted that “eBay will be forced to change its business model”, and I’ve seen a disturbing number of sellers saying that the fine .
What seems to have been missed in many of the reports, but is potentially much more significant for sellers, is that eBay have also been banned from allowing the listing of four perfume brands. Kenzo, Guerlain, Dior and Givenchy had sued eBay, not over the sale of fakes, but because genuine merchandise sold on the site was not sold through the manufacturers’ official distribution channels.
The court cited the need for specialist knowledge when selling these products, just as Lancome did when they decided to sue both eBay and unauthorised sellers of their produce. This, frankly, is nonsense: we’re talking about perfume you can pick up off the shelf in Boots, not pharmaceuticals. It’s restriction of trade, and shouldn’t be allowed under European law. By getting their case heard on the back of the LVMH counterfeiting issue, these perfume brands have managed to neatly obscure that their case is all about protectionism. If you get a bottle of Poison for Christmas, and you’d really rather have a bottle of Flowers, you can now forget selling one on eBay and picking up the other at the same time: French law now apparently thinks this is illegal. This cannot be good news for sellers or or buyers: it can’t be good news for anyone but the perfume companies, who can now keep their prices as high as they like.
eBay have said they will appeal the decision. In a statement published on eBay Ink, they said
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 believe that this ruling represents a loss not only for us but for consumers and small businesses selling online, therefore we will appeal … The attempt to use the ruling to confuse the separate issues of counterfeit and restrictive sales suggests that counterfeit suits are being used by certain brand owners as a stalking-horse issue to reinforce their control over the market.
It’s crucial that the two issues are kept separate, because they are different: fakes destroy buyers’ trust in eBay; bargain branded goods are what keep them coming back. However much as sellers we might want eBay to do more to keep fakes off the site, no seller should be supporting the perfume houses’ attempts to control their markets.