Auction website eBay has been ordered to pay luxury goods giant LVMH £32 million in compensation for handling fake Louis Vuitton, Christian Dior and Givenchy brands.

In a test case that will have widespread ramifications for the online retail industry, a Paris court today ruled eBay's French site had not done enough to stop the sale of counterfeit bags, perfumes and other items.

Last month, eBay was fined in a similar case involving French luxury goods giant Hermès. In the latest case, the Louis Vuitton handbags and luggage business, clothing brand Christian Dior Couture and LVMH perfume brands Dior, Guerlain, Kenzo and Givenchy accused eBay of "culpable negligence".

The perfume brands also sued for the "illicit sale" of their products, saying auctions involving their legitimate perfumes were illegal because only specialist dealers are permitted to sell them.

The verdict came amid a flurry of legal action against the online giant. In France, auction houses took legal action against it in December, accusing it of encouraging trade in pirated and stolen goods.

Last September, cosmetics giant L'Oréal launched legal action against eBay over the sale of bottles of counterfeit perfume.