LVMH claimed in the Paris lawsuit that eBay, the world's largest Internet auctioneer, has a heightened responsibility to prevent fraud. The ruling also prohibits the sale of LVMH perfumes on eBay.
"It's a groundbreaking decision that will help protect creativity,'' said Pierre Gode, a member of LVMH's supervisory board and adviser to chairman Bernard Arnault. "It's an important precedent.''
LVMH, the world's largest luxury-goods maker, said it found in 2006 that 90 percent of the Louis Vuitton and Dior-labeled perfumes, watches and handbags on eBay were fakes.
Online sales of counterfeit clothes, bags and jewelry cost makers of original products about $30 billion a year, Tiffany & Co. and other retailers claim in a US lawsuit.
eBay said in a statement that it would appeal.
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"Today's ruling is not about our fight against counterfeits; 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,'' eBay said in an e-mailed statement. "We will fight this ruling on their behalf.''
'Trust and Security'
Besides the fine, the court ordered EBay to post the ruling on all its Web sites in English and French for three weeks and to pay for its publication in three French or international publications of LVMH's choice.
EBay already spends about $20 million annually on ``trust and security'' matters and has 2,000 employees around the world to fight counterfeits.
The court ruled that EBay isn't qualified to sell LVMH perfumes under the Christian Dior, Kenzo, Givenchy and Guerlain brands, which should be distributed only through selected retailers with trained staff.
``This decision lays down the rules for sale of specific merchandise such as perfumes whose sale is reserved for special places with appropriate presentation,'' Gode said. ``Online retailers will now be subject to the same rules as traditional retailers.''
Another court ruled this month in a case filed by Hermes International SA that the San Jose, California-based company is a partner to its vendors and must take more steps to fight fakes.
The cases in France, EBay's fourth-largest market, are seeking to raise the legal requirements on the company. The judge in the Hermes case said EBay should require certificates of authenticity and serial numbers for sales