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eBay fights for right to sell luxury stuff in EU

(Real) Louis Vuitton, please

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eBay has told European lawmakers that more than three quarters of a million people have signed an online petition demanding changes to regulations that let luxury brand makers limit who can sell their products online.

The internet tat house is embroiled in a longstanding feud with luxury good firms like Tiffany & Co., Louis Vuitton, and Rolex, who say their brands are devalued by sales on ignoble auction websites like eBay.

The European Commission is amending rules on so-called vertical agreements between manufacturers and retailers. Existing guidelines are expire in May 2010. The current rules allow manufacturers to require vendors to have a brick-and-mortar store before they are allowed to sell their merchandise online, while imposing stricter sales regulations on websites.

Luxury brands claim the offline retail "sales experience" is essential to their prestige and that online vendors free-ride on their promotion investments.

eBay calls the the restrictions an "unfair restraint" on the right to buy and sell goods in the European Single Market and are motivated on luxury brand owners' desire to artificially inflate prices by eliminating competition from online sellers.

The company's online petition was launched in early July. It has since collected 747,936 signatures from Europe, including 251,712 from the UK, 200,061 from Germany, and 103,666 from France.

eBay's campaign is spearheaded by London MEP Mary Honeyball in the European Parliament.

"The presentation of this unprecedented petition should be a wake up call to the Commission to think again about its review of these regulations," she wrote on her blog. "They are ten years out of date now and need to be made fit for the 21st century. The manufacturers and traditional retailers will be lobbying the Commission, working hard to protect themselves from having to compete with on a fair basis with internet businesses. Those of us who want a fair deal for consumers must lobby just as hard, and today we made a racing start."

Honeyball is an admitted eBay fan, writing that she became convinced of its website's value when she needed a last-minute "fancy hat" for a wedding.

eBay has run afoul of luxury goods makers many times in the past over the auctioning of counterfeit products on its website. Last year, eBay was ordered to pay £30.6m in damages to the handbag group LVHM over fakes.

In June of this year, a judge in London ruled that eBay has no legal duty to protect other companies' trademarks or stop users from infringing them as a result of a lawsuit from cosmetic company L'Oréal. ®

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