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eBay Gets Hit For Allowing Sale Of 'Fakes'
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msg:3686778
 11:08 am on Jun 30, 2008 (gmt 0)

eBay Get Hit [uk.reuters.com] For Allowing Sale Of 'Fakes'
A court in France ordered eBay to pay 38.6 million euros (30.6 million pounds) to luxury goods group LVMH for allowing the sale of counterfeit goods on its online auction site.

Monday's decision, a month after eBay was ordered by another French court to pay handbag maker Hermes 20,000 euros for allowing the sale of fakes, is the latest episode in a long fight between luxury goods makers and the online auctioneer.


 

vincevincevince




msg:3687306
 1:12 am on Jul 1, 2008 (gmt 0)

'Allowing' is a difficult word to use here. There are fake handbags on sale in Brick Lane Market; should Tower Hamlets Council be hit with a fine?

Both in Brick Lane and at Ebay, 'fakes' are not permitted, and some enforcement activity does take place. I would not say that 'allowing' is what's happening here in either case.

I believe that the persons who should be subject to these fines are the persons making the sales, the petty traders.

ispy




msg:3687393
 4:29 am on Jul 1, 2008 (gmt 0)

How did they know it was a kingreplica? Did they purchase one? The others could be real.

Moncao




msg:3687437
 5:58 am on Jul 1, 2008 (gmt 0)

"should Tower Hamlets Council be hit with a fine"

If they were notified and did nothing, yes.

Funny. I do not really have much sympathy for the brand name holders in the main. They switched production to 3rd world countries employing 11 year old workers to make extra profit, then the management of the sweat shops ripped them off and now they have a nett loss. I bought a repro from an auction house the other week and sent it back for a refund. EBay spend more time farting around about swords with curved blades over 50 cm long in the UK (the law is "No Samurai Swords" but eBay chose to make a big deal out of it) then they do with repros and other fraud. Serves 'em right. Vive Le France.

maximillianos




msg:3687626
 11:55 am on Jul 1, 2008 (gmt 0)

I think eBay is in a tough situation, since they often handle the financial transaction for every product sold (ie - Paypal).

On the other hand, a flea market building owner does not handle any of the transactions, he just rents the space out.

farmboy




msg:3687643
 12:38 pm on Jul 1, 2008 (gmt 0)

I think eBay is in a tough situation, since they often handle the financial transaction for every product sold (ie - Paypal).

I don't think that's an issue.

Does this fine only consider the transactions processed through PayPal?

Are banks being fined for transactions where the customer sent the seller a check?

Is Visa being fined for transactions where the customer paid the seller direct by Visa?

FarmBoy

aleksl




msg:3687668
 1:06 pm on Jul 1, 2008 (gmt 0)

Moncao: I do not really have much sympathy for the brand name holders in the main. They switched production to 3rd world countries employing 11 year old workers to make extra profit, then the management of the sweat shops ripped them off and now they have a net loss.

don't pity them, they don't have a net loss. that $500 "designer" handbag your wife or girlfriend really craves actually costs $5 to produce. A counterfeit market is also their free advertising platform.

Lord Majestic




msg:3687709
 2:06 pm on Jul 1, 2008 (gmt 0)

How did they know it was a kingreplica?

Price would be a giveaway - fake (and stolen) goods are a lot cheaper than genuine versions.

weeks




msg:3687759
 3:03 pm on Jul 1, 2008 (gmt 0)

This ruling is absurd. Next they'll try to make the phone company responsible for any fraud made in a call.

Lord Majestic




msg:3687788
 4:06 pm on Jul 1, 2008 (gmt 0)

Next they'll try to make the phone company responsible for any fraud made in a call.

Not such an absurd situation - if a phone company runs "premium calls number" which gives them big profit then if this is done irresponsibly without measures to prevent scams that cost people, then that phone company is likely to be liable. That said I am not sure what exactly Ebay can do in this case apart from maybe banning sales of products that are most likely to be faked, ie most expensive handbags etc.

pageoneresults




msg:3687804
 4:39 pm on Jul 1, 2008 (gmt 0)

If counterfeit goods are put up for sale on our site, we scrap them as soon as possible," eBay said.

Emphasis mine. But wait, there's more...

But the group, which saw around $60 billion worth of goods sold across its platforms last year, says that as a host for independent vendors, it has only a limited responsibility and capacity to regulate what is sold on its site.

Emphasis mine again. Maybe eBay's business model is at stake here? Or, maybe the business model needs to change quickly before they end up in a world of financial hurt. If you read that article, there are a line of luxury good manufacturers that are preparing to sue eBay. In fact, there have been many who have already sued and won. At some point, the cost of litigation will exceed the profits generated and they will be "forced" to change.

eBay says it has stepped up efforts to fight counterfeits through programmes that analyse suspicious sales patterns by particular vendors as well as VeRO, or verified rights owners, a system that helps block sales of counterfeits.

Only after being sued by the "Who's Who" in manufacturers of luxury goods. eBay is losing quite a bit of coin in these lawsuits, take a gander at that article, both pages. They've got their hands full and they only have themselves to blame.

srtech




msg:3687810
 4:45 pm on Jul 1, 2008 (gmt 0)

So I guess anything sold on Ebay should be mailed to Ebay first so they can check it's authenticity, then they can re-mail it to the person who bought it. Brilliant.

chrisv1963




msg:3687972
 7:46 pm on Jul 1, 2008 (gmt 0)

France again ...

bears5122




msg:3688011
 8:26 pm on Jul 1, 2008 (gmt 0)

I don't see this as just holding Ebay responsible for some sales, I see it as a ruling for repeatedly not putting in any effort to stop the fraud. Sure it's a fine line, but the courts felt they crossed it. The fact is that Ebay was profiting off the sale of fraudulent goods, and they were knowingly doing so. Much different than the examples above where the individuals had no idea.

And yes, it is my opinion they know about it and don't do anything to stop it. I dabble a lot on Ebay with sports memorabilia and can tell you that the same guys selling fakes do it over and over. They do get auctions pulled by Ebay upon numerous complaints, but accounts never seem to get closed. Maybe this ruling will force Ebay to actually start taking care of their customers who are being ripped off.

ispy




msg:3688111
 12:33 am on Jul 2, 2008 (gmt 0)

Price would be a giveaway - fake (and stolen) goods are a lot cheaper than genuine versions

Not if it is being sold used. At least thats what Ebay used to be, now it is mainly resellers.

thecoalman




msg:3688118
 12:42 am on Jul 2, 2008 (gmt 0)

They'll jack the price up for the fakes to give them legitimacy.

Don't see why this is ebay problem, if they were sold in the local classifieds the paper wouldn't be responsible. There's no practical way that ebay can guarantee that they aren't fake. the only solution I see is if they stop allowing sales of any brand name product.

Lord Majestic




msg:3688120
 12:49 am on Jul 2, 2008 (gmt 0)

They'll jack the price up for the fakes to give them legitimacy.

Well, people who buy those fakes (I hope) are not stupid and realise that they buy fake for low price, as soon as the price goes up to "used" authentic these people will try to buy much cheaper fakes from elsewhere on the net.

IanKelley




msg:3688181
 4:41 am on Jul 2, 2008 (gmt 0)

Maybe eBay's business model is at stake here?

Maybe so, and not just ebay of course, all online auction services.

Come to think of it, my last checkout at Amazon.com included items sold, and individually shipped, by 4 different non Amazon owned merchants.

Maybe a lot of business models are at stake. Or would be if france wasn't already infamous for missing the point where the net is concerned.

weeks




msg:3688476
 1:43 pm on Jul 2, 2008 (gmt 0)

if a phone company runs "premium calls number" which gives them big profit then if this is done irresponsibly without measures to prevent scams that cost people, then that phone company is likely to be liable.

My Good Lord Majestic, that is true. However, this is not the case which was before the court. One might assume that the buyers were happy with the price they paid for the so-called fakes. The buyers might even know they were knock-offs.

The suit is from the owners of the brands. My point is the brands have a legit complaint, but with the sellers (and perhaps the buyers), not eBay.

Lord Majestic




msg:3688500
 2:21 pm on Jul 2, 2008 (gmt 0)

My point is the brands have a legit complaint, but with the sellers (and perhaps the buyers), not eBay.

True, but Ebays responsibility should be to assist fully to solve this problem - the issue appears to be that Ebay does not want to do anything (probably on cost grounds, but I guess ultimately they don't want to set precedents as they profit from all sales regardless if they are legal or not), cancelling auctions is not exactly a solution to problem, not even account banning - perhaps Ebay should use much stricter checks on who the sellers so that sellers know that they will be personally liable in case of such things. This will certainly reduce sales on Ebay, yet another reason why they don't want to do much and that's why they got sued.

weeks




msg:3688598
 4:13 pm on Jul 2, 2008 (gmt 0)

Ebays responsibility should be to assist fully to solve this problem - the issue appears to be that Ebay does not want to do anything

What would you have them do that they are not doing, or that those who brought the complaint couldn't do themselves? The sellers are known easily enough.

Lord Majestic




msg:3688622
 4:36 pm on Jul 2, 2008 (gmt 0)

What would you have them do that they are not doing

I think Ebay should require all sellers to provide sufficient amount of hard evidence of who they are so that in case of any illegal activity these people can be easily taken to court, or maybe they should pay to 3rd party for insurance against such instances - perhaps payable by users who want for some reason to sell Prada shoes well below market rate. Or maybe Ebay just needs to pay for some people to be always 24/7 on the phone to deal with such things.

ambellina




msg:3688641
 5:04 pm on Jul 2, 2008 (gmt 0)

that $500 "designer" handbag your wife or girlfriend really craves actually costs $5 to produce.

If that is really the case, then my LV should have fallen apart the moment I shoved all of my worldly belongings into it.

LVMH is a huge empire. Arnault and his team put a lot of work in to deliver high-quality products. Maybe I'm a snob, but I think EBay should be responsible for policing the counterfeit items posted on their site. If the only way that is possible is to stop the sale of anything claiming to be an LVMH product (whether it is acually real or fake), then so be it.

zoltan




msg:3688714
 6:53 pm on Jul 2, 2008 (gmt 0)

I think that ebay should not be responsible. Suing ebay is like suing a newspaper, there is no way ebay can "review" and decide whether a product is authentic or fake. Totally nonsense.

pageoneresults




msg:3688731
 7:10 pm on Jul 2, 2008 (gmt 0)

Maybe I'm a snob, but I think eBay should be responsible for policing the counterfeit items posted on their site.

Me too! < I always like getting one of those in!

Personally? I think the onus goes back to the Luxury Goods Manufacturers. They need to tighten down the authenticity procedures for their products, that would be the first step.

In reference to LV, I think their products should all be registered. When you have ladies bags in the $3,000 to $5,000+ range, that requires some sort of registry process. Maybe there should be a chip embedded into each LV that identifies it? I don't know, whatever they do, they need to do it now.

But, let's look at this from the "fakes" perspective. While the consumer is duped, the brand is not. People see those LV patterns on a bag and they are not thinking fake. Just like that 2 carat diamond on your honey's finger. People "look" at it and assume it is not fake. Only a trained eye could tell. And, you surely don't want a trained eye to tell you that the 2 carats on your honey's finger is a fake!

If I were LV, I'd be following the life of each LV product. At those price levels, they should have some sort of LoJack installed. ;)

eBay is responsible as they provide the outlet for those selling the fakes. Just like MySpace would be responsible in certain instances with their platform. Based on the number of lawsuits lost and the number pending, its a losing battle for eBay. But, when you look at the total numbers, it is pocket change and part of doing business as they say.

Murdoch




msg:3689648
 4:35 pm on Jul 3, 2008 (gmt 0)

Only a trained eye could tell. And, you surely don't want a trained eye to tell you that the 2 carats on your honey's finger is a fake!

If you're buying your girlfriend jewelry off of Ebay, you've got problems to begin with :)

Like most other stances I take on issues like these, I do think that in some part Ebay is responsible. Saying that they have "limited responsibility and capacity" to moderate their own website is ridiculous. Like I've said before, if your user base is growing to such a degree that you cannot personally moderate the activity on it, then you need to start investing in people or a system that can do it for you. If you have an incredibly large user base and you haven't found a way to monetize it to the point where you can afford such moderation, then maybe you should go back to business school.

That being said, it would be extremely hard to police such claims as the ones being made regarding designer replicas. Price is definitely a good start, there's no way people can effectively sell real designer stuff that far below retail and still say it's "new and authentic". I definitely think that the sellers that are getting away with totally duping buyers by lying to them about the authenticity of the purchase need to be dealt with, however possible. Ebay can't just turn a blind eye to this, they should at least try some kind of proactive approach rather than just say "Hey it's on our terms and conditions". That would at least earn them some credibility with companies whose profits rely heavily on brand name.

But then we'll always have the people who KNOWINGLY buy fakes because they are so much cheaper than the real thing. These people refuse to pay $1K for a handbag but will pay $100 for something that looks just like it that they know isn't authentic. Eventually the sellers will just start using language that everyone will "be in on" like:

USED but Just Like New LVMH hand-bag - Free Shipping!

How many things in that headline could you make secret language? The bolded, uppercase USED? The hyphenated hand-bag? The Free Shipping? It's like when you weren't allowed to sell certain things on Ebay but you could get away with it if you sold a baseball card and then "gave away" the actual item. There will always be a way around the rules for people who are all willing to play the game together.

So do I believe Ebay should be responsible for ALL fakes? No. Do I think they should get off their butts and do SOMETHING that will at least punish the scam artists? Yes. Wherever that middle ground is, I have no idea but it would be nice to find :)

gmiller




msg:3691382
 12:43 am on Jul 6, 2008 (gmt 0)

The question is, how much money do they have to lose to these sorts of lawsuits before they pull all physical operations out of France and strategically redeploy to Okinawa?

ambellina




msg:3692614
 8:55 pm on Jul 7, 2008 (gmt 0)

In reference to LV, I think their products should all be registered. When you have ladies bags in the $3,000 to $5,000+ range, that requires some sort of registry process. Maybe there should be a chip embedded into each LV that identifies it? I don't know, whatever they do, they need to do it now.

All LV bags have a serial number tag. Usually hard to get to, but it's there.

basenotes




msg:3696980
 8:16 am on Jul 12, 2008 (gmt 0)

Yesterday it was ruled that eBay is no longer allowed to permit sales of the following LVMH fragrance and product brands; Dior, Givenchy, Kenzo and Guerlain; on its French site or any international site accessible from France.

Ebay statement (french): [actualites.ebay.fr...]
CNN piece: [legalpad.blogs.fortune.cnn.com...]

What is particularly important is that this forbids even the sale of unwanted gifts. Are LVMH going to be patrolling yard sales now?

As an aside, the Guerlain fragrance house has a history going back over 150 years and have produced hundreds of fragrances, many of which are now no longer commercially available -- the injuction technically stops people from reselling fragrances as collectibles that are no longer in production.

vincevincevince




msg:3696985
 8:54 am on Jul 12, 2008 (gmt 0)

It will be very interesting to see how this pans out in the end, and if the EU has anything to say. It does sound suspiciously like it could be a continuation of the long tradition of French courts protecting French companies.

To me, an appropriate ruling would require Ebay to release details of all sellers who are reasonably suspected to have sold reproductions of LVMH products to allow them to be taken to court individually; and possibly to require additional proof of identification from anyone listing LVMH products.

I don't see it is any business of the courts interfering in private sales of genuine goods on the secondary market, but I do see why LVMH wants to stop it by the back door.

This 31 message thread spans 2 pages: 31 ( [1] 2 > >
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