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Clash of the Titans: LVMH v. eBay

How treacherous are the waters of eBay?

French newspaper Le Monde reports today that LVMH and Dior Couture are suing eBay and its Swiss subsidiary in French court over their failure to police the sale of counterfeits.  According to the article, LVMH is claiming 20m euros and Dior Couture 17m euros in damages and interest from counterfeit sales that occurred between 2001 and 2005.  The companies further note that in the 2nd quarter of 2006, there were 150,000 listings for Louis Vuitton bags and 300,000 listings for Dior products, 90% of which were fake.

While eBay has not yet commented on the lawsuits, a spokesperson described its VeRO (verified rights owners) program, which allows trademark owners to request the removal of counterfeit listings.  LVMH believes that the program is inadequate and that eBay privileges certain large sellers, a charge that eBay denies. 

The claims may be limited by E.U. and French laws that protect internet hosts from liability. LVMH lawyers argue, however, that eBay is not merely a host but a provider of services, a strategy that resulted in success against Google earlier this year.  THe lawyers for LVMH liken this approach to suing landlords who rent space to counterfeit retailers.

By suing eBay, LVMH and Dior Couture join Tiffany and Danish clothing company Aktieselskabet Af, which have brought claims against eBay in the U.S. and China, respectively. 

Is it reasonable to ask eBay to pre-screen every item offered for sale?  Probably not, given the scope of its operation and the large numbers of low-ticket sales.  Is VeRO an adequate solution?  Probably not, if the statistics offered by LVMH and Dior Couture are correct. 

From a consumer perspective, fakes on eBay are particularly insidious; many claim to be "100% authentic," and there is no way for a potential bidder to inspect the goods.  Even the pictures online are often copies, as opposed to photos of the actual merchandise offered for sale.  So what's a girl looking for an online bargain to do?  I've always assumed that counterfeiters read anticounterfeiting tips, with an eye to circumventing them, as often as consumers do.  Still, here are a few thoughts (and please feel free to email me your own):

  1. Be suspicious.  If the item is sold out everywhere but the seller has somehow acquired one (or more), it's probably fake.
  2. If the price is too good to be true, it's probably fake.
  3. If the seller accepts returns for a large "restocking fee" -- e.g. 20% of purchase price -- it's probably fake.
  4. If the seller has very few previous sales but seems like a professional, ask yourself whether this might be someone who has been banned before and returned under a different name. 
  5. Consider the location of the seller.  Although a dear colleague noted yesterday that the "fakes come from Asia" meme can easily slip into an orientalist bias, a point with which I agree, it remains the case that at the moment a great deal of large-scale counterfeit production is occurring overseas.  (Of course, a great deal of legitimate production is also taking place in China, and fakes come from Europe and the U.S. as well.) 
  6. Buy only from trusted sellers.  Some watchdog groups like My Poupette keep lists.
  7. If you're on a budget, consider avoiding the counterfeit question altogether and buy a cool, no-name "stealth bag" or other fashion item from an indie designer.  Sure, the idea of a logoed "it bag" at an unbelievably low price is tempting, but internet roulette is not a buyer's game.

Comments

My wife got burned on a fake Kate Spade -- paying for a fake was bad enough, but worse still, the seller never sent the thing. Only afterward did I find this site that goes into great detail about how to spot fake Kate Spades on ebay. Worth a look.

Great site, Matt -- thanks! I hope that your wife ended up finding the real thing eventually.

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