The European court of Justice ruled that the sale of advertising for branded keywords does not amount to trademark infringement.
This will benefit Google in adwords revenue as well as third party resellers of big brands products.

Does this hurt the branding of large companies like Louis Vuitton?

This could diminish branding in search results for these large brands but they can counter act this with a cohesive search marketing strategy.
Firstly these large brands usually have powerful websites that dominate the natural search rankings for any branded keywords, if they optimize correctly they have the upper hand in organic search.

Coupled with an aggressive Pay Per Click campaign they could have a lower CPC (Cost Per Click) if they properly optimize their landing pages. This gives them a prominent position for a search query in that they will have the top results form a PPC standpoint as well as solidifying that dominance with premier rankings in the natural search results as well.

This dominance of the search results real estate should establish them as the owner of that brand.