September 21, 2006
eBay Sued Over Counterfeit Handbags
LVMH Moet Hennessy Louis Vuitton is tired of counterfeiters getting rich knocking off its brands and it wants eBay to do something about it.
According to a lawsuit filed by the manufacturer against eBay in France, sellers on the auction site have repeatedly sold items advertised as Louis Vuitton and Dior originals when, in fact, they are counterfeits.
The manufacturer claims it found 150,000 ads for Louis Vuitton handbags and another 300,000 for Dior items on eBay. Ninety percent of the items, it claims, were frauds.
“We’re baffled, quite honestly, by some of what’s going on, and we plan a vigorous defense of the lawsuit,” said Hani Durzy, a spokesperson for eBay.
Mr. Durzy told MarketWatch it’s up to manufacturers and retailers to make sure that legitimate items and not counterfeits are sold through the eBay service. “We believe this is nothing more than an attempt by these companies to shirk their own responsibilities to police their own brands,” he said. “What we do is already above and beyond what we’re required to by law.”
EBay has faced a similar situation before with a suit brought against it by Tiffany Co. That suit has yet to be resolved.
Discussion Question: Who is responsible for the counterfeit goods sold on eBay?
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In defense of eBay, they have an active and robust department of individuals that vigorously WORK WITH manufacturers and brands to shut down actions and the auctioneers of fake goods.
I’ve been in attendance at a special conference with eBay and branded consumer products companies to discuss current efforts and how to further strengthen the efforts in CONCERT with one another. eBay is very concerned and working diligently WITH those who recognize the root of the problem to shut down the frauds. Criminals typically take the easy route. When the easy money goes away, they find the next easy target. A polite conversation with eBay would have served to attack the root issue.
You know, for me this speaks to something rather deep about our consumer culture. Up until recently I was an online retailer and also an eBay PowerSeller. When selling off-the-beaten-path brands I encountered lovely people in cyberspace. But when I dealt in prestige brand luxury goods I repeatedly encountered from buyers such a ruthless disregard, rage, and complete indifference to fairness that it scared and sickened me. It was as if consumers badly coveted the prestige items that had been incessantly marketed to them, but they were furious that the retail prices were inaccessible, and they wanted to get even. This type of consumer may love the items themselves, but among many, there’s absolutely no loyalty or love for the companies themselves. In fact, there’s a hatred born of desire that’s been planted but can’t be satisfied. Given the cloak of anonymity in cyberspace, this seething hatred sure comes out.
My God!! I just bought four “Louis Vuitton” hand bags (reg. retail $1,000) for $20 each for my wife’s birthday on eBay! I was convinced they were authentic even though the seller was a guy named Tetse Unbukimbo from some place in Nigeria…. And that reminds me of the “Rolex” I bought for $5 at that flea market with the 2nd hand that gave up after 2 weeks and those “Levi’s” from Dollar Saver with the grommets that rusted out that only cost $10. Who’s going to protect the little guy from these unscrupulous people?? I smell a class action law suit somewhere – but who should be the target: China, eBay, me (for being so gullible)…. Anyway, back to eBay where I’m looking for a great deal on genuine Moet & Chandon champagne….
Back in the good old days a thief had to take his booty to a fence and received about 10 cents on the dollar for stolen merchandise. Now the crooks simply sell it on eBay and get 50 to 80 cents on the dollar. The ease of converting stolen merchandise into cash has never been easier. The same rings true for other forms of theft, like trademark infringement. eBay has a responsibility to help control these activities. I personally have notified eBay of fraudulent sellers and seen auctions deleted from eBay. Apparently LV doesn’t think eBay is doing enough and they may be correct!
You’re not going to stop the counterfeiting until people stop buying knock-off goods.
I live in New York, the counterfeit capital of the world — not necessarily for production but for sales. Walk up Madison Avenue on any given day and vendors are selling everything from Omega watches to Kate Spade handbags. The people who might buy them in the stores are the same ones snapping them up on the street.
My wife and I were walking along New York’s Canal Street a couple of weeks ago. An Asian woman, whose English was limited to “Vuitton” and a couple of trendy designers pulls me in the back of her 10-ft by 5-ft shop where they are ripping open boxes with Chinese lettering on them.
Stop the flow at the source and put checkpoints in place in the supply chain. Free trade does not mean disrespecting the laws of the land.
Buyer and manufacturer beware! eBay is the channel through which the goods are sold. They are not responsible for verifying or authenticating goods. This is the purchaser’s responsibility. If a manufacturer wants to ensure that their products are not being duplicated, they need to go after and enforce laws against the fake manufacturers, not the retailers who sell them. It is LVMH’s responsibility to police their brand and ensure that there is a robust effort to pursue manufacturers who duplicate their brands.
eBay is like a shopping mall. They are providing sellers a place to sell their goods. The consumer is responsible for making sure what they have is real. If the consumer is satisfied by having a cheap imitation, then the consumer should be happy. If this handbag can be so easily imitated, it must not be very special to begin with.
Sacre bleu! Come on, monsieurs! eBay is just a handy target with deep pockets. Police your own brand. If Macy’s were caught selling counterfeit handbags, would you go after Macy’s, or… New York City, for allowing Macy’s to operate a store? Con Edison, for conspiring to light the product? God & Company, for allowing evil? Monsieur Vuitton, he making a little joke, eh?
Much of the world does not abide by our trademark and patent laws. Both China and Russia are well known for making and selling fake goods. The world trade organizations have simply failed to make members not only stop making fakes, but also to stop importing and selling them. eBay can not be held responsible unless they knowingly permitted sales of fakes. eBay does have a responsibility to provide companies and government officials with information on sellers. Additionally, they should suspend sellers who are under investigation.
One step we have seen eBay take to reduce fraud is in electronics. To sell electronics on eBay, the seller must supply the item’s identification/registration numbers. In the next town over from me, an individual stole electronic equipment off some boats. He then proceeded to list these stolen items on eBay. One of the victims was searching eBay for replacement equipment and found his stolen unit. The police will have an easy time with this one.
Conclusion is, not only are fakes being sold, but so are stolen goods. Victims must be diligent and criminals must be brought to justice.
The seller and — by extension — the buyer. The only way eBay could guarantee the authenticity of any item (let’s think about all those “antiques” offered for sale) would be to physically inspect every suspect item. That’s impossible given (a) eBay’s volume and (b) the fact it’s a virtual, not physical, retailer. eBay is the classic example of “caveat emptor.” In cyberspace, just like real life, if a deal looks too good to be true, it probably is.
This is like holding a neighborhood responsible for someone at a garage sale selling a counterfeit product. eBay should certainly work to make members aware that selling knock-off products is illegal, and make them provide online acknowledgement to that effect (which I believe they do.) Further, I think they should make it known that they will fully cooperate with authorities in the pursuit and prosecution of those who break the law — meaning they’ll release member contact information, transaction history, etc.
LVMH was smart to bring their lawsuit about fake Louis Vuitton bags in France. It helps to bring a suit where you’re the hometown favorite. eBay hurts its own brand when it lists counterfeits for sale. Perhaps LVMH should copy electronics manufacturers: (1) add serial numbers to its products and (2) ask consumers to register them. Then eBay could ask the sellers to list the serial numbers. It’s unlikely that counterfeiting can be stopped, but the volume can be reduced. It takes more than 1 lawsuit, though. Lucky for LVMH, Rolex, and other luxury brands: their margins can afford a more comprehensive effort.
Perhaps if they priced their handbags at a more reasonable level the profit margins for counterfeiters would vanish. Yes their margins would shrink but their volumes would increase and if they get the model right then their overall profitability would increase.
It is surprising that LVMH is getting twisted about greedy people cashing in on their greed.
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In defense of eBay, they have an active and robust department of individuals that vigorously WORK WITH manufacturers and brands to shut down actions and the auctioneers of fake goods.
I’ve been in attendance at a special conference with eBay and branded consumer products companies to discuss current efforts and how to further strengthen the efforts in CONCERT with one another. eBay is very concerned and working diligently WITH those who recognize the root of the problem to shut down the frauds. Criminals typically take the easy route. When the easy money goes away, they find the next easy target. A polite conversation with eBay would have served to attack the root issue.
You know, for me this speaks to something rather deep about our consumer culture. Up until recently I was an online retailer and also an eBay PowerSeller. When selling off-the-beaten-path brands I encountered lovely people in cyberspace. But when I dealt in prestige brand luxury goods I repeatedly encountered from buyers such a ruthless disregard, rage, and complete indifference to fairness that it scared and sickened me. It was as if consumers badly coveted the prestige items that had been incessantly marketed to them, but they were furious that the retail prices were inaccessible, and they wanted to get even. This type of consumer may love the items themselves, but among many, there’s absolutely no loyalty or love for the companies themselves. In fact, there’s a hatred born of desire that’s been planted but can’t be satisfied. Given the cloak of anonymity in cyberspace, this seething hatred sure comes out.
My God!! I just bought four “Louis Vuitton” hand bags (reg. retail $1,000) for $20 each for my wife’s birthday on eBay! I was convinced they were authentic even though the seller was a guy named Tetse Unbukimbo from some place in Nigeria…. And that reminds me of the “Rolex” I bought for $5 at that flea market with the 2nd hand that gave up after 2 weeks and those “Levi’s” from Dollar Saver with the grommets that rusted out that only cost $10. Who’s going to protect the little guy from these unscrupulous people?? I smell a class action law suit somewhere – but who should be the target: China, eBay, me (for being so gullible)…. Anyway, back to eBay where I’m looking for a great deal on genuine Moet & Chandon champagne….
Back in the good old days a thief had to take his booty to a fence and received about 10 cents on the dollar for stolen merchandise. Now the crooks simply sell it on eBay and get 50 to 80 cents on the dollar. The ease of converting stolen merchandise into cash has never been easier. The same rings true for other forms of theft, like trademark infringement. eBay has a responsibility to help control these activities. I personally have notified eBay of fraudulent sellers and seen auctions deleted from eBay. Apparently LV doesn’t think eBay is doing enough and they may be correct!
You’re not going to stop the counterfeiting until people stop buying knock-off goods.
I live in New York, the counterfeit capital of the world — not necessarily for production but for sales. Walk up Madison Avenue on any given day and vendors are selling everything from Omega watches to Kate Spade handbags. The people who might buy them in the stores are the same ones snapping them up on the street.
My wife and I were walking along New York’s Canal Street a couple of weeks ago. An Asian woman, whose English was limited to “Vuitton” and a couple of trendy designers pulls me in the back of her 10-ft by 5-ft shop where they are ripping open boxes with Chinese lettering on them.
Stop the flow at the source and put checkpoints in place in the supply chain. Free trade does not mean disrespecting the laws of the land.
Buyer and manufacturer beware! eBay is the channel through which the goods are sold. They are not responsible for verifying or authenticating goods. This is the purchaser’s responsibility. If a manufacturer wants to ensure that their products are not being duplicated, they need to go after and enforce laws against the fake manufacturers, not the retailers who sell them. It is LVMH’s responsibility to police their brand and ensure that there is a robust effort to pursue manufacturers who duplicate their brands.
eBay is like a shopping mall. They are providing sellers a place to sell their goods. The consumer is responsible for making sure what they have is real. If the consumer is satisfied by having a cheap imitation, then the consumer should be happy. If this handbag can be so easily imitated, it must not be very special to begin with.
Sacre bleu! Come on, monsieurs! eBay is just a handy target with deep pockets. Police your own brand. If Macy’s were caught selling counterfeit handbags, would you go after Macy’s, or… New York City, for allowing Macy’s to operate a store? Con Edison, for conspiring to light the product? God & Company, for allowing evil? Monsieur Vuitton, he making a little joke, eh?
Much of the world does not abide by our trademark and patent laws. Both China and Russia are well known for making and selling fake goods. The world trade organizations have simply failed to make members not only stop making fakes, but also to stop importing and selling them. eBay can not be held responsible unless they knowingly permitted sales of fakes. eBay does have a responsibility to provide companies and government officials with information on sellers. Additionally, they should suspend sellers who are under investigation.
One step we have seen eBay take to reduce fraud is in electronics. To sell electronics on eBay, the seller must supply the item’s identification/registration numbers. In the next town over from me, an individual stole electronic equipment off some boats. He then proceeded to list these stolen items on eBay. One of the victims was searching eBay for replacement equipment and found his stolen unit. The police will have an easy time with this one.
Conclusion is, not only are fakes being sold, but so are stolen goods. Victims must be diligent and criminals must be brought to justice.
The seller and — by extension — the buyer. The only way eBay could guarantee the authenticity of any item (let’s think about all those “antiques” offered for sale) would be to physically inspect every suspect item. That’s impossible given (a) eBay’s volume and (b) the fact it’s a virtual, not physical, retailer. eBay is the classic example of “caveat emptor.” In cyberspace, just like real life, if a deal looks too good to be true, it probably is.
This is like holding a neighborhood responsible for someone at a garage sale selling a counterfeit product. eBay should certainly work to make members aware that selling knock-off products is illegal, and make them provide online acknowledgement to that effect (which I believe they do.) Further, I think they should make it known that they will fully cooperate with authorities in the pursuit and prosecution of those who break the law — meaning they’ll release member contact information, transaction history, etc.
LVMH was smart to bring their lawsuit about fake Louis Vuitton bags in France. It helps to bring a suit where you’re the hometown favorite. eBay hurts its own brand when it lists counterfeits for sale. Perhaps LVMH should copy electronics manufacturers: (1) add serial numbers to its products and (2) ask consumers to register them. Then eBay could ask the sellers to list the serial numbers. It’s unlikely that counterfeiting can be stopped, but the volume can be reduced. It takes more than 1 lawsuit, though. Lucky for LVMH, Rolex, and other luxury brands: their margins can afford a more comprehensive effort.
Perhaps if they priced their handbags at a more reasonable level the profit margins for counterfeiters would vanish. Yes their margins would shrink but their volumes would increase and if they get the model right then their overall profitability would increase.
It is surprising that LVMH is getting twisted about greedy people cashing in on their greed.