Ebay is already one of the most successful businesses in the world but they’ve been locked into bitter negotiations with luxury brands such as Rolex and Louis Vuitton for sometime now.
The arguement is all about whether the online auction site has the right to sell luxury branded products. At the moment the law states that manufactures are allowed to require a seller of their products to have a physical store or shop before being permitted to sell their luxury brand’s products on the internet.
The current selling rules are due to expire in May 2010 so Ebay have seized the moment and engaged the European Parliament in dialogue to try and soften the regulations after 2010.
When Ebay Inc met with the European Parliament it took with it a petition signed by 750,000 people all asking for regulatory reform. The petition states that luxury brands shouldn’t be allowed to “insist that Internet retailers must have an offline retail store before they can sell online.”
On the other side of the argument the luxury brands are saying that their merchandise shouldn’t be available anywhere and everywhere because their products are part of a ‘prestige brand’ that represents exclusivity and above average quality.
Unfortunately for Ebay this isn’t the only problem that’s come up when selling luxury goods online- Ebay have been embroiled in legal battles with luxury brands such as LVMH Moet Hennessy Louis Vuitton and Tiffany & Co before over the sale of counterfeit goods on their auction site.
In fact, Ebay Inc had to pay out more than $61 million last year to LVMH because of the fake goods being sold. However they successfully staved off attacks from L’Oreal, Tiffany & Co and The Rolex Group, who claimed their luxury products were also being copied and sold openly on the Ebay site.