Louis Vuitton wins against eBay Inc.
Ouch… a Paris Court ordered eBay to pay $63 million in damages to Louis Vuitton for negligence in allowing the sales of counterfeit Louis Vuitton on the website. (Read more about it here…)
You have to hand it to Louis Vuitton. They got the job done. They single handedly lit a fire under the figurative backside of eBay Inc, and got them to do what needed so much to be done… to clean up the marketplace.
The court decision makes so much sense to me… and obviously eBay is appealing, but the fake situation on eBay was SO bad for SO long… it’s not shocking that the courts would lay down a heavy hand.
Let’s face it. eBay has made a lot, and I mean a LOT of money on the sale of counterfeit goods on their site. (I’m estimating on average eBay sells about 16,000 Louis Vuitton items a month at an average sales price of $375 with average start prices of $175. That makes the average fee for Louis Vuitton items at about $17. Multiply that times 192,000 items a year… and we’re looking at $3.8 million in fees annually for the LV brand alone. LV’s claim of 90% fake on eBay was probably about right until the big overhaul in fall 2006… so you do the math.)
I mean, we (putting myself with the collective community of online shoppers to whom authenticity absolutely essential) had been almost badgering eBay for years and years to do something… and yet the situation on eBay just literally got worse and worse. The countless fakes, the one day auctions, the zero feedback seller with 50 NWT LV listings, the fake second chance offers, the $75 BINs for $1000 bags. I mean, now we ask where all the buyers have gone?
They said that nothing more could be done- they were doing all they could, they’re just a venue, yada, yada, yada. A few years ago, I could go through a whole page of Louis Vuitton listings on eBay and literally not find a single authentic bag.
That is not the situation now. The vast majority of Louis Vuitton listings on eBay today are authentic.
So if eBay was just a venue, and was doing all they could do… what happened?
Tiffany & Co and Louis Vuitton sued. eBay woke up. They turned on the lights, swept the place out, cleaned the place up, batten down the hatches and locked the doors.
It was hard for all of us to adjust at first, but eBay has taken the right first steps to improve the atmosphere and the trust level that we all needed in a platform to be able to sell authentic luxury goods online.
eBay now monitors closely brands that are frequently counterfeited. There are restrictions on how long you have to be selling on the site to list those brands, and how many you can list at once. There is particular wording watched for that gives red flags that a listing may be fraudulent. Brands that are watched don’t get listed immediatley, but go through and overview process for up to 10 hours before they hit the site.
eBay has come a long way, baby!
So I’m fine with the damages awarded by the Parisian Court…
What is frightening part to me:
Part of that ruling includes payment of 3.25 million Euros to Christian Dior, Givenchy, Kenzo and Guerlain for allowing perfume to be sold outside of the “authorized network”.
The result of this part of the decision is that eBay is completely barred from listing these cosmetic and perfume brands on its site PERIOD.
eBay’s “official response”:
“Today’s ruling is not about our fight against counterfeits; today’s ruling is 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 everyday,” EBay said in an e-mailed statement. “We will fight this ruling on their behalf.”
Yipes? So I get J’adore Dior perfume for my birthday and never use it (which I did, and I don’t… it’s just not my favorite). I now can’t list it on eBay because I am not a member of the authorized distribution network for Christian Dior?
Hmmm… got to get back to you when I look into this more.
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Tags: Christian Dior, counterfeit, eBay, fake, Givenchy, Guerlain, Hermes, Kenzo, lawsuit, Litigation, Louis Vuitton
June 30th, 2008 at 12:48 pm
I was “duped” into buying a LV bag on eBAY a few years ago, paid with PayPal. I went thru the entire process of identifying the seller, trying to get my money back, etc. and neither eBAY nor PAYPAL did anything about it. I was so disgusted that I canceled my account, never to do business with them again. I think that if they cracked down when people like me complained, they would not be in this spot.
June 30th, 2008 at 12:57 pm
No wonder! I was like, why is my listing taking forever to show up? I’m glad ebay is FINALLY doing something about this!
June 30th, 2008 at 2:26 pm
Sherry,
You are totally right. The sad thing is, if they’d have cleaned things up YEARS ago, they’d probably have made a heck of a lot more money since. More authentic sellers would feel comfortable listing, more buyers would be buying. Win, win. They let things get really bad before making needed changes, and it’s hurt them in more ways than the $63 million since (reputation, sales of legit items etc, good will, buyers like yourself leaving and never coming back… it’s a shame!)
Sarah
June 30th, 2008 at 2:28 pm
Priscilla,
Yes, in fact, if you edit your listing, it will again sit in a holding mode for up to 10 hours until it’s approved.
I agree. It’s a pain, but I’m glad to endure whatever for a cleaner marketplace. A site clean of fakes is win win win. (A win for buyers, a win for sellers and a win for eBay!)
Sarah
July 2nd, 2008 at 8:16 pm
It’s about time somebody did something to stop this. The worse thing about Ebay and Paypal at the time is they expected you to mail back the counterfeit item to the counterfeits in order to receive a full refund of your money. Well I checked into this situation and the USPS and UPS or any other delivery organization within the United States does not allow for the trafficing of counterfeit items to be used in the delivery of any illegal items. In order words Ebay and Paypal expected the customer who got ripped off to break the law and use the USPS, UPS, etc to mail back an illegal item so you could get your money back in the first place, makes no sense to me. You mail back this item to the crooks so they can relist it on Ebay and scam someone else out of their hard earned money plus if you got caught with this item by the post office you could go to jail yourself and your the one who did nothing wrong in the first place. I had some jerk at Paypal once tell me that the only thing that’s illegal to mail through the post office is counterfeit money, unbelievable!