INTERNET auctioneer eBay Inc was ordered to pay LVMH Moet Hennessy Louis Vuitton SA 40 million euros (US$63 million) over claims it didn't do enough to stop the sale of counterfeit goods.

LVMH, the world's largest luxury-goods maker, claimed in the Paris lawsuit that eBay has a heightened responsibility to prevent fraud. The ruling also places limits on online sales of LVMH perfumes.

"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 said it found in 2006 that 90 percent of 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 US$30 billion a year, Tiffany & Co and other retailers claimed in a lawsuit in the United States.

EBay said yesterday that it would appeal, Bloomberg News reported.

The company already spends about US$20 million annually on "trust and security" matters and has 2,000 employees around the world to fight counterfeit goods.