June 30 (Bloomberg) -- EBay Inc. was ordered by a French court to pay LVMH Moet Hennessy Louis Vuitton SA almost 40 million euros ($63 million) over claims the Internet auctioneer didn't do enough to stop the sale of counterfeit goods.

LVMH claimed in the Paris lawsuit that EBay has a heightened responsibility to prevent fraud. The ruling also prohibits the sale of LVMH perfumes on EBay.

EBay, the world's largest Internet auctioneer, said in a statement that it would appeal.

``It's a groundbreaking decision that will help protect creativity,'' said Pierre Gode, a member of LVMH's supervisory board and adviser to chairman Bernard Arnault. ``It's an important precedent.''

LVMH, the world's largest luxury-goods maker, said it found in 2006 that 90 percent of the Louis Vuitton and Dior- labeled perfumes, watches and handbags on EBay were fakes. Online sales of counterfeit clothes, bags and jewelry cost makers of original products about $30 billion a year, Tiffany & Co. and other retailers claim in a separate U.S. lawsuit.

The Internet auctioneer must pay 19.28 million euros to leather-goods maker Louis Vuitton, 16.4 million euros to Christian Dior fashion house and 3.19 million euros to the makers of Christian Dior, Kenzo, Givenchy and Guerlain perfumes, the court ruled.

EBay fell 8 cents to $27.53 in Nasdaq Stock Market trading at 11:24 a.m. New York time. LVMH gained 22 cents to 66.27 euros in Paris.

`We Will Fight'

``Today's ruling is not about our fight against counterfeits; today's ruling is about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that EBay empowers everyday,'' EBay said in a statement. ``We will fight this ruling on their behalf.''

Besides the fine, the court ordered EBay to post the ruling on all its Web sites in English and French for three weeks and to pay for its publication in three French or international publications of LVMH's choice.

EBay spends about $20 million annually to identify counterfeit goods and remove them from its site, and has 2,000 employees around the world dedicated to the task, it said. The retailer had revenue of $7.67 billion last year.

The court ruled that EBay isn't qualified to sell LVMH perfumes, which should be distributed only through selected retailers with trained staff.

Merchandise Rules

``This decision lays down the rules for sale of specific merchandise such as perfumes whose sale is reserved for special places with appropriate presentation,'' Gode said. ``Online retailers will now be subject to the same rules as traditional retailers.''

EBay claims LVMH is using the ruling to ``confuse separate issues'' and to impose more control over its markets.

``Overzealous enforcement of restrictive sales practices are anti-competitive and give consumers a bad deal,'' EBay said. ``The ruling also seeks to impact the sale of second-hand goods as well as new genuine products, effectively reaching into homes and rolling back the clock on the Internet and liberty it has created.''

Another court ruled this month in a case filed by Hermes International SA that San Jose, California-based EBay is a partner to its vendors and must take more steps to fight fakes.

The cases in France, EBay's fourth-largest market, are seeking to raise the legal requirements on the company. The judge in the Hermes case said EBay should require certificates of authenticity and serial numbers for sales.

To contact the reporter on this story: Ladka Bauerova in Paris at lbauerova@bloomberg.net.

Last Updated: June 30, 2008 11:25 EDT