San Francisco  - Online auction giant eBay said Monday that it plans to appeal a French court ruling to pay 40 million euros for internet sales of counterfeit goods.

The judgement came in a lawsuit by luxury-goods conglomerate Louis Vuitton Moet Hennessy (LVMH), which alleged that eBay's French site turned a blind eye to sales of counterfeit goods. The ruling also prohibits the sale of LVMH perfumes on eBay.

According to legal analysts, the ruling could open the floodgates for similar lawsuits from other brand-name manufacturers angry that inferior copies are available on the world's largest auction site.

EBay says it removes counterfeit items when brand owners point them out and claimed that the lawsuit was an attempt by goods makers to exert greater control over secondary sales of authentic products outside their normal distribution channels.

"We believe that the overreach manifests itself through an attempt to impose, in France, a business model that restricts consumer choice through an anti-competitive business practice," eBay said Monday in a statement. "We believe that this ruling represents a loss not only for us but for consumers and small businesses selling online. Therefore we will appeal."

In the lawsuit, LVMH said it found in 2006 that 90 per cent of its products offered on eBay were fakes. On Monday, the company welcomed the ruling.

"The court has dismissed as without foundation the argument used by eBay to exonerate itself that its clients are solely responsible for their illegal undertakings when transacting," read a statement from LVMH. "EBay is not a host but a broker." (dpa)