Ebay has built an empire through the sale of second-hand items by private sellers, but as an increasing amount of retailers offer new brand name products, the online auction site finds itself in the legal crosshairs.
The New York Times reported that ebay will appeal a $60.8 million lawsuit filed by luxury goods maker LVMH Moët Hennessy Louis Vuitton. In the suit, Louis Vuitton alleges that 90 percent of the products sold on the ecommerce site are fakes. A French court found that ebay should be doing more to curtail the sale of counterfeit items.
This isn’t the first time ebay has run afoul of a brand name market. In 2006, high-end jewelry maker Tiffany & Co. filed suit against ebay for counterfeit products being sold on the site.
In response to the lawsuits, ebay has enforced selling limits on products favored by counterfeiters as well as attempting to educate consumers on how to spot fakes. Louis Vuitton has also entered the fight, hiring investigators to sniff out phonies on the site. However, piracy has become a billion dollar business and it’s becoming increasingly difficult to stem the tide of counterfeit products.
While ebay has been working to keep its site knockoff-free, the company feels this case is about more than a few knockoff handbags and bangles. “…[T]oday’s ruling is not about our fight against counterfeiting,” eBay said. “It’s about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers every day.”
So who’s responsible for policing authenticity on ebay? Should it be the companies who are the best equipped to spot a fake or should it be ebay, the company that gets a small commission fee for every item sold –- real or otherwise?