A bottle of perfume could end cross border EU trade

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eBay and LVMH are due a hearing in the French Commercial Courts on Monday as to whether eBay has complied with a 2008 injunction to block sales of genuine bottles of perfume made by Christian Dior, Kenzo, Givenchy and Guerlain. At stake is a fine of up to €50,000 for each and every day one of the banned products has been available for French eBay users to purchase. The hearing will not affect the outcome of eBay’s appeals which are due to take place on 27th and 28th May 2010, but is simply to determine if eBay has complied with the injunction. But that’s not what’s important….

…what’s important is that French eBay users who own a bottle of perfume don’t have the right to sell it. French users are blocked from buying perfume from any eBay site world wide, not just from eBay France. French consumers are being discriminated against and have lost the freedom to purchase perfumes from other EU countries. For the French the EU Single Market no longer exists.

You might think “So what! – Why shouldn’t brands be able to limit where their products are bought and sold?“, however it’s not just online businesses that this affects. On eBay UK over the last year consumers listed 10 times as many bottles of perfume as businesses. This affects products that you personally own in your own home. Restricting resale of products means when you buy something someone else still retains rights to it – items that you own and paid for are not yours to dispose of when you no longer need them.

So back to Monday’s hearing – Whilst eBay have respected the injunction and done their utmost to comply, it’s the thin end of the wedge for users. If the selective distribution ban of legitimate product isn’t overturned in May 2010, it will give legitimacy and precedent for other brand owners to do likewise. It will lead to higher prices for consumers and ultimately result in businesses owning stock which one day they discover they can no longer sell.

This case also undermines the aims of an open EU Single Market with freedom to trade across borders. EU legislation needs updating to ensure that all EU citizens can purchase products freely within the Single Market. If selective distribution exists and anti-competitive practices are allowed to flourish then EU cross border trade will be stifled and that will put the Internet back 10 years.



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