eBay breaks bread with luxury goods firms

Counterfeit handbags at dawn

By John Leyden • Get more from this author

Posted in Financial News, 21st July 2008 13:16 GMT

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eBay is to pow-wow with luxury goods manufacturers which want the online tat bazaar to better police sales of fraudulent merchandise. The meeting, held in London on 28 July, brings together lawyers from eBay, along with representatives of luxury goods association the Walpole Group, which counts in its membership shoemaker Jimmy Choo.

Luxury goods manufacturers want eBay to do more to prevent the sale of counterfeit goods on the site. eBay's position, vindicated in the US by a recent court ruling against Tiffany, the jeweller, is that it's up to manufacturers to police their own trademarks on eBay, and bring infringing items to its attention. eBay will then act to annul auctions.

A federal judge decided last week that eBay had not violated Tiffany's copyright when it inadvertently handled the sale of counterfeit products bearing the brand, and eBay welcomed the ruling. It is unknown if Tiffany intends to appeal.

However, a French court took the opposite line last month in a case involving LVMH, the group that markets Moet Hennessy and Louis Vuitton, awarding $63m in damages against the online tat bazaar after it was judged culpable for facilitating the sale of knock-off goods.

Counterfeit items are prohibited on eBay, but brand holders want the auction house to be more proactive in preventing the sale of fake designer goods.

Representatives of the luxury goods industry said the eBay-Tiffany ruling was a disservice to customers. "Counterfeit or fraudulent goods are rampant in the marketplace, and internet retailers must accept the responsibility to protect the consumer by guaranteeing the authenticity of the luxury goods they sell," the Luxury Institute. According to the trade group, sales of counterfeit luxury goods bring in $15bn a year.

Next week's meeting is described as an attempt to forge an agreement between eBay and the representatives of luxury brands. An anonymous source familiar with the agenda for the talks told The Daily Telegraph:

"Both sides want to make progress in answering questions such as: how can brand owners and online auction sites work together to identify repeat offenders and track trends to try to pre-empt posting of counterfeits; how can we work together with law enforcement agencies; and how can we collaborate to craft legislation locally and internationally that addresses protection of IP rights and help to create a safe and vibrant online marketplace?" ®

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