French appeals court finds eBay liable for counterfeits

The Court of Appeals in Paris, France, has upheld a lower court's 2008 decision that online auction site eBay is liable for the illegal online auctions of counterfeit goods.

The case centred on consumer goods - notably LVMH handbags, fashion clothing, and perfume - but could have a bearing for any counterfeit traded through the site's systems.

The higher court found that eBay's legal defence - based on arguments that it could not be held accountable for store content provided by third parties - was not valid.

The exclusion from liability for so-called 'information society services' did not apply in this case, ruled the court, because eBay did not play a passive role in the selling of materials auctioned on its site. On the contrary, the e-commerce platform has a "highly promotional" role, it said.

There was a crumb of comfort for eBay in that the court only considered content on the company's French and UK sites in calculating damages, rather than its worldwide portfolio. Damages were therefore slashed from the lower court's figure of €38.6m to €5.6m.

In July, eBay was also held accountable for the sale of counterfeit Hermes bags by an appellate court in France.

While eBay is not a recognised channel for counterfeit medicines, the ruling could have a bearing on the potential liability for other online commerce sites which have been linked to the trade in counterfeit and adulterated pharmaceuticals and raw materials, such as business-to-business (B2B) trade boards.

In the past, sites such as alibaba.com and ec21.com have been accused of not doing enough to stop counterfeit and other dubious materials being sold via their e-commerce platforms. 

 
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