Where Should eBay Draw the Line Against Fakes?

Last week, online auction giant, eBay, said it would appeal a $63 million ruling against it by a French court, which found the company liable for facilitating the sale of counterfeit luxury goods, including the famed Louis Vuitton signature handbags. The suit was brought by LVMH Group, which owns the upscale accessories brand Louis Vuitton, Moet & Chandon bubbly and Hennessey cognac. (That's almost too much luxury for one company.)

In its statement about the appeal, eBay said that the ruling "represents a loss not only for us but for consumers and small businesses selling online." The company also pointed out that it spends "$20 million" each year on combating counterfeiters. (EBay netted $348 million last year on earnings of $7.67 billion.)

But where's the line? Husslers selling bootleg DVDs on the street are rounded up and unceremoniously thrown in the slammer. Small-time pawn brokers caught "fencing" stolen goods get similar treatment, sometimes whether they know the items are stolen or not. The law rarely spares mom-and-pop merchants dealing in counterfeits. And the "file-sharing" service, Napster, pretty much got run out of town on a rail.

Why should eBay, which in essence brokers relationships between buyers and sellers, be treated any differently just because it's bigger, richer, public and online? Or do we live in caveat emptor kind of world?

What would you do if you were eBay's new CEO, John Donahoe?

(Handbag courtesy Louis Vuitton)
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