That’s certainly the way eBay (EBAY) is casting itself today, in its response to being ordered by a French court to pay the equivalent of US $61 million in Euros to luxury goods manufacturer Louis Vuitton.
LVMH Moet Hennessy Louis Vuitton SA (LVMUY.PK), which makes Fendi bags and a lot of other high-ticket items, accused eBay of failing to stop counterfeit goods being trafficked on eBay. Ebay contends Vuitton is trying to rein in legitimate resale of Vuitton products, which it contends is not fair.
In its press releasing vowing to appeal the ruling, eBay says “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. […] The ruling also seeks to impact the sale of second-hand goods as well as new genuine products, effectively reaching into homes and rolling back the clock on the Internet and liberty it has created.”
“$61 million is a big chunk of change,” says Shawn Milne, who follows eBay for Oppenheimer & Co. “It’s not the right precedent, and I was not glad to see it,” Milne told me in a brief chat. Milne points out that of the 970,000 sellers on eBay, upwards of 40,000 “power sellers” account for the lion's share of the volume. As it’s unlikely 40,000 power sellers are trafficking in large volumes of gray-market goods, Milne thinks most after-market resale that happens on eBay is between individuals. To try and eradicate that kind of person-to-person trade in legitimate goods is “far-reaching,” Milne thinks. Still, he notes the ruling, if upheld, won’t have any immediate impact on eBay’s financials.
