Women’s Wear Daily and The New York Times just reported that LVMH, the parent of Louis Vuitton, Christian Dior, Parfums Christian Dior, Parfums Kenzo, Guerlain and Parfums Givenchy, and other French luxury brands has just won a significant case against eBay in the French courts. According to the article, the French court has held eBay liable for the sale of counterfeit LVMH items and the sale of legitimate LVMH items by non-authorized sellers.
It is the barring of sales by the so-called non-authorized sellers that is troublesome to me because these non-authorized sellers could easily be folks like you and me.
Many owners of high-end trademarks and branded goods companies have policies, which define a “seller” as anyone who offers three or more branded items for sale. Once one is included within the definition of “seller”, it only requires a check on the trademark owners’ “Sellers” list to determine whether or not one is “authorized”.
Casual sellers and independent dealers who buy these goods and resell them as used, don’t appear on these lists. Ebay, on the other hand, lacks the capacity to check whether the goods being offered are legitimate or not and consequently merely takes off its site any goods reported to it by the trademark owners and being sold by “unauthorized sellers”.
The result: all this high end stuff that is trumpeted as holding its value or even increasing in value over time, is unsalable on eBay.
Obviously, these policies were established for legitimate reasons to maintain an orderly distribution system for the manufacturer and owner of the marks. But on the Internet, where everyone can be a seller, and where people often go to buy and sell trademarked goods not wanted by the original owner, this is a problem.
In fact, the Internet exacerbates this problem because it is the market in which branded goods experience much more success than unbranded goods and at the same time the Internet was a market touted to be friendly to the independent, often smaller and less powerful, merchant.
To the extent that this decision, already being heralded by many of the major brand owners as a significant victory, signals that the Internet is now on track to become the domain of the powerful, large brand owners, this is a setback for independent and smaller merchants and ultimately for all consumers who will inevitably pay more for branded goods. The next time you are told that a high priced luxury branded product is intended to be passed from generation to generation, take it seriously: You may never be able to re-sell it.
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