Disclaimer - I used to work at eBay but my work was not in any way connected with policies on counterfeits or Paypal. So the following is my speculation only.

Disclaimer - I used to work at eBay but my work was not in any way connected with policies on counterfeits or Paypal. So the following is my speculation only. While this specific case does sound awful, I'd bet that eBay/Paypal's draconian policies towards counterfeits is a result of number of lawsuits that designer labels have filed in the past against eBay. It would likely be impossible for eBay/Paypal to physically examine every item that is claimed to be counterfeit, so the blanket policy which lets them claim in court that they are doing everything reasonable to prevent counterfeit items being traded on eBay. Again, this particular case does suck, but honestly I think the real villains are the Louis Vittons of the world.