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December 5, 2007
French auction watchdog issues court challenge to =
=E2=80=98illegal=E2=80=99 eBay
Adam Sage in Paris

EBay, the American online auction site, is facing an unprecedented =
lawsuit in France, where a government watchdog wants it to be declared =
illegal.

The move could lead to the arrest of the company=E2=80=99s executives if =
the claim were to be upheld by the High Court in Paris.

The French Council of Sales, which regulates the country=E2=80=99s =
auction market, filed the case after denouncing eBay for allegedly =
failing to comply with French consumer protection laws.

Christian Giacomotto, the council=E2=80=99s chairman, told The Times =
that the e-commerce giant was flouting regulations governing auction =
houses in France, including a requirement to take out insurance against =
fraud.
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He said that buyers who received faulty or fake goods stood little =
chance of getting their money back under eBay=E2=80=99s operating =
procedures.

=E2=80=9CThis is unfair competition, because other auctioneers have to =
make sure they are transparent and that they provide =
guarantees,=E2=80=9D Mr Giacomotto said.

The California-based company has dismissed the challenge as =
=E2=80=9Ctotally unjust=E2=80=9D. It said that it acted only as a =
broker, =E2=80=9Cfacilitating meetings between buyers and =
sellers=E2=80=9D, and not as a public auction house. Auction regulations =
were, therefore, not applicable and =E2=80=9CeBay=E2=80=99s activities =
and those of the auctioneers are totally separate,=E2=80=9D it said.

Mr Giacomotto said: =E2=80=9CWhat is the difference? They charge a =
commission to the seller and a commission to the buyer. These people =
cannot say they are responsible for nothing at all. If you rent your =
house to someone who sets up an illegal casino in it, then you share =
part of the responsibility. Our ambition is not to regulate the world, =
but we want groups such as eBay to accept their responsibility.=E2=80=9D

The French watchdog said that it had evidence of alleged frauds =
perpetrated on eBay, including a successful bidder for an 18th-century =
painting who received a photocopy pasted on to a piece of wood. In =
another case, a user said that he had paid =E2=82=AC9,000 (=C2=A36,400) =
to an advertiser in Austria for a car that was not delivered.

If the lawsuit was upheld, eBay would have to comply with costly and =
time-consuming French legislation. Any failure to do so could leave its =
executives open to the sort of legal action that has resulted in the =
arrest of internet gaming executives on French soil. Under the =
country=E2=80=99s law, online gambling is illegal.

EBay, which registered annual global revenue of $5.97 billion (=C2=A32.9 =
billion) last year, said that France was its fourth-biggest market with =
ten million registered users.

The company is also facing legal action in New York, where Tiffany, the =
jeweller, has accused it of failing to stop the sale of counterfeit =
jewellery. LVMH, the French luxury goods group, and =
L=E2=80=99Or=C3=A9al, the cosmetics giant, have also filed similar =
lawsuits against eBay.

http://business.timesonline.co.uk/