EBay Fights Free Trade and Policing Scammers and Loses
Jul 7th, 2008 by Sally
On June 30, 2008 the French Court ruled that eBay pay $61Million USD to LVMH in damages to the luxury products group LVMH for letting fake versions of its designer bags and fragrances be sold on the online auction site.
The case was brought on two separate grounds –
q That eBay’s measures to stop counterfeit goods being sold in 2006 were inadequate
q EBay allowed genuine, but unauthorized, sales of certain perfume brands.
These were primarily Louis Vuitton and Christian Dior products.
In America, eBay has been sued by Tiffany, the iconic jeweler, on the grounds that the site has aided violations of its trademarks by allowing counterfeit items to be sold in its auctions. Tiffany claims that 95 per cent of all the items sold on eBay under the Tiffany trademark are fakes and that the site’s measures for policing this trade are inadequate.
Regardless of what happens on appeal, these lawsuits are bad news for eBay. It now seems likely that at least some of the jurisdictions in which the company operates will insist that it becomes much more rigorous in policing activity on its site. That spells trouble for the company’s business model because policing is expensive, and eBay relies on skimming small fees from billions of transactions run entirely by software with no human intervention. You see, POLICING is a labor intensive job. This will impair eBay’s bottom line if they feel obligated to do a better policing job.
***************************************************************************
Many see this court ruling as a restriction of free trade . And I think they are right. Ford motor company doesn’t care if you sell your used Ford Pick Up truck. They don’t own it any more. The owner of the product should be able to sell it.
But, that’s not what the lawsuit was about. It was about eBay being aware that a Louis Vuitton was a fake and not getting it off of it’s listing platform. EBay was informed that a seller was selling fake handbags. They were given the item number on the listing. At the time there were 6 days left on the auction. Bids were flying in.
q EBay did not remove the item claiming they didn’t have enough time to catch it. Of course, they got the “final value fee” on the $800 handbag. This happened over 1 million times.
q EBay removed the one item from the seller and never looked at the other 50 items from that seller which were also fakes. Their requirement is they only look at what they are given, they are not private investigators.
q When a listing is removed the seller gets their listing fees returned. The seller then puts the reported item back up for sale within 30 minutes with a new listing number which eBay could not monitor because it hadn’t been reported.
This is the most troubling paradigm of the infamous eBay platform. Their inability to shift to a new paradigm.
q They claimed to be all but helpless at monitoring fake or scamming products.
q They could only act on what they were told by other buyers or sellers.
***********************************************************************************************************
This is what every eBay member should be concerned about. EBay’s inability to monitor itself. I also blame myself here because I felt that reporting something to eBay that was clearly in violation of eBay’s and my policies was a lot like being a “traitor”.
*******************************************************************************************
My personal tale of woe
In April 2008 I ran into this problem head on. EBay sellers were striking, new rules were going into effect. My first approach was to hide my head in sand. So what if the forest around me is on fire, I want to have a BBQ in the back yard.
When the new digital download rules went into effect I was forced to find a new category “EBay User Tools” because my other category was only for classified ads. I had been selling “learning CD’s” for 2 years in the same category.
Suddenly I was bombarded with scam ads showing women in little bikinis offering a chance for you to make $160K a month on eBay. One ad I nicknamed “Miss Boooobie”. Worse than that, they got a higher ranking in the featured section – using eBay’s “Best Match”, so I was always about #20 on the listing page even though I had 1 hour left on my “Buy It Now” and 10 of those above me were “Miss Booobie” with 20 days left.
In desperation I took eBay’s advise and clicked on “Report This Item” and turned those suckers in. They were all classified ads, so some of them at 20 days left or more. These “Home Page Featured” and “Featured” classified ads were never removed.
Do the math, if you want to understand this. 500 classified ads sprinkled in various categories. All Home Page Featured and Featured. That’s about $100 in listing fees for eBay. i.e. I was attacking a $50,000 in income to eBay – telling them they had to give this money back.
I called eBay and was told that this is a time consuming process and to allow at least 2 weeks for removal. I turned in over 150 of these classified ads every week for months. I was sure I was wasting my time. And mostly, I was. I just wanted my “featured $15.00 ad” to get its just placement.
This went on for 2 months with little success. I called eBay at least 10 times. My theory: The Squeaky Wheel.
Since the ruling on June 29th by the French court, these ads that I am forced to continuously report are being removed as fast as I am reporting them. Suddenly, they have totally disappeared from my category area and I am #1 on the featured listings. My sales are soaring. EBay needs to reevaluate their position on “scam products” on their servers and hire the staff to monitor these discretions. This is not a hopeless task.
Thank you France for causing eBay to take a second look at it’s feeble monitoring processes. I sold 20 disks last week and “Miss Booobie” is nowhere to be found in my category listing area. Thank you eBay.
Experiential Learning from this article:
If your sales are slumping, take a look in your listing category and get rid of the scammer’s. They could be directly affecting your pocketbook.
