Restricting distribution of products, which many would argue violates the principles of free trade, is supported by precedent under European law.

Legislation allows the makers of luxury products to control who sells their wares. They can object to shops reselling their goods if they usually stock less expensive products or if the product is not displayed to their satisfaction.

The extension of this into the world of online retailing is a significant departure that could undermine the business models of big online sellers such as eBay and Amazon. Both have large communities of small retailers trading under their banner.

On Tuesday Moët Hennessy Louis Vuitton (LVMH), the French luxury goods maker, won £31.5 million in a case against eBay for selling counterfeit goods. The internet site was also told by the French court that it cannot allow sales of four LVMH perfumes, even if they are genuine.

Iain Connor, intellectual property specialist at Pinsent Masons, the law firm, said: “It seems that this ruling has taken the right of exclusive distribution to what would be a logical conclusion in an offline world, but is an interesting extension into the online world.”

The Office of Fair Trading is looking closely at the French judgment. “We are following with interest the LVMH case and will consider the implications for UK consumers of the judgment and any appeal,” it said.

The French decision, against which eBay is appealing, makes it more likely that other companies will try to restrict the sale of goods through the site.

EBay has managed to avoid prosecution in Britain and elsewhere until now because it is not defined as an auctioneer. If this changed, it would be extremely vulnerable to more challenges.

EBay and other online auction sites have thrived on the proceeds of small businesses and individuals selling their wares. If they are restricted even further, it will be one of the first great challenges to the online marketplace - and free market principles.

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