French eBay ruling raises big questions about the Internet

Monday’s ruling by a French court that eBay must pay French luxury goods manufacturer LVMH $60.8 million and do more to prevent counterfeit sales (think: fake Louis Vuitton handbags) raises big questions about globalization and the future of e-commerce.

As International Herald Tribune blogger Daniel Altman puts it, who should police the Internet? There’s a potential slippery slope here, Altman points out, if countries are left to their own devices and sue portals such as Amazon for books considered libelous or YouTube for videos considered indecent.

The French, at least, have a history of holding Internet providers accountable for content hosted on sites they own. There’s precedent in the United States, too, from the 2001 decision ordering Napster to prevent illegal file sharing between users of its site.

To some, Monday’s ruling reeks of protectionism. The ruling condemns eBay’s unauthorized sales of certain perfumes, limiting the sale of these luxury items to approved channels such as perfume and department stores, not the open market.

What’s the answer? Leaving regulation to national courts may lead to a hodgepodge of different rulings in different countries, making it difficult for multinational firms to navigate.

Altman asks if a “global authority” to help nations and multilationals sort out e-commerce is necessary. Perhaps, but it’s hard to imagine what such an authority would look like or how it would operate. I think it’s safe to say eBay is on its own for now.