eBay Liable for Counterfeits

A French court ordered eBay to pay Louis Vuitton and other makers of luxury bags €38.6 (variously reported as $60.8 and $63.2 million) in damages for sales of counterfeit handbags on the website, the largest damage award eBay has incurred in connection with its quality-assurance practices.  The court ruled eBay did not employ adequate measures to prevent the sale of fake bags.  eBay announced it will appeal the decision.  The New York Times reports that the decision “is unlikely to have a drastic effect on the way eBay conducts business because it has already made changes to police its site for counterfeit goods.”  eBay noted that it employs over 2,000 people to deal with sales of counterfeit goods and that it cuts of 95% of fraudulent sales before they occur.  Of course with millions of ongoing active sales at any moment, there remains considerable potential for fraud.

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