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Strike 2: eBay loses to LVMH

The gavel has fallen -- and hit online auctioneer eBay pretty hard.

In a much anticipated decision, a French court today ordered eBay to pay LVMH 38.6 million euros for allowing the sale of counterfeits on its site.  The award is allocated among several divisions of the luxury conglomerate, primarily LVMH and Christian Dior Couture, with smaller amounts to perfume brands Christian Dior, Givenchy, Guerlain, and Kenzo. 

Following on the heels of Hermes' victory against eBay in another French court earlier this month, the decision essentially shifts more of the responsibility for policing offerings to the auction site, which profits from each sale -- counterfeit or not.  After learning of its loss in court, eBay immediately announced its intention to appeal and went on a rhetorical offensive, stating, "Today's decisions are not about fighting counterfeiting. It's about LVMH's desire to protect commercial practices that exclude all competition." 

Obviously the French judges haven't bought eBay's argument -- but will home court advantage help?  Or will the long awaited U.S. decision in Tiffany v. eBay be strike 3 for the auction site?  Stay tuned.

(For background on the case, click here.)