Slashdot Mirror
eBay Describes the Scale of Its Counterfeit Goods Problem
Ian Lamont writes "As the Tiffany vs. eBay lawsuit winds its way through a federal appeals court, eBay has trotted out some numbers that show how many sellers attempt to sell fake goods on the auction site. Millions of auctions were delisted last year, and tens of thousands of accounts were suspended after reports were made to eBay's Verified Rights Owner program, which lets trademark owners notify eBay of fake goods being sold on the site. eBay says 100% of reported listings were removed from the site last year, most within 12 hours, and the company uses sellers' background information to make sure that they don't create new accounts to sell delisted items. Tiffany brought the suit against eBay in 2004, alleging that eBay was turning a blind eye to counterfeit luxury goods and demanding that eBay police its listings for bogus goods. Tiffany lost the case last July and will shortly present its arguments to the US Court of Appeals for the Second Circuit in New York. A similar case in France cost eBay $61 million."
...but how many of those items were NOT counterfeits, but merely real items that the trademark owner wants to illegitimately prevent from being legitimately resold? Like that GAP promotional CD a while back.
If anything, Ebay is already too far on the side of "protecting" the various merchants who pretty much hate First Sale. The web abounds with tales of perfectly legitimate stuff being taken down, with approximately the same care shown in DMCA request cases.
Given that, I'd really hate to see what the situation would look like if Ebay's enemies win.
I used to work at an electronics retailer and we'd sell our returns on ebay(those that were functional, we had a lax return policy).
Despite being authorized distributers of the products we put on there, we had our accounts suspended several times by VeRO when one of the many third party watchdog services reported us erroneously. We usually had to track down somebody at the manufacturer and get them to fax "yes they can sell our stuff" to ebay.
And then a few weeks later, it'd happen again. Those watchdog services must get paid by # of items removed.
It's not just Tiffany or designer products. EBay is full of counterfeit stuff for everyday goods as well. 90% of the razor blades on EBay are fakes. If you buy Gillette Fusion refills there, you're likely to get something that looks nearly identical but will tear off half your face when you try to use them. I got ripped off for $70 -- and getting refunds through Paypal / EBay for counterfeit items is a joke when they want you to return the items with tracking to China where they'll just be used again to scam another consumer.
Too bad eBay doesn't put as much effort in to shutting down scammers of all kinds, not just those selling fake name brand goods.
Site policy has zero tolerance for sellers who list counterfeit items, and will also suspend any seller who lists a counterfeit item more than one time. Sharpe reports that...30,000 sellers [were] suspended.
One of the major reasons that eBay has so many fraudulent listings is that scam artists exploit a flaw in eBay's user database. And I'm not even talking about listening bootlegged or forged items. I'm talking about listing items that don't even exist.
The scam artists find eBay accounts and break into them, specifically accounts that have high feedback numbers (or transactions recorded) but have little activity in the last year. They basically dig through the user database for inactive accounts and then try to hijack them, taking over the account, and then changing the billing information before listing the fake items. Because the hijacked account already has positive feedback with it people are far more likely to trust the account and auction, not being critical enough to suspect they are being scammed for money or being sold knockoff items.
Another scam I've seen is where people purchase tons of electronics, like say they purchase dozens of video game consoles. They take pictures of the consoles to prove that they have them in hand. They then sell them to friends, family, or strangers for cash in person, while keeping the receipts for the original product. They then list the consoles on eBay and sell them to people taking the money from PayPal. But, because they've already sold the item off for cash, they tell the person who sent them money over PayPal that they will get a refund. They then call the cops, say that they have been robbed and someone stole several dozen expensive electronic components from them and then they recover whatever homeowners or rental insurance covers stolen property.
I purchase tons of expensive electronics on eBay. Multi-thousand dollar synthesizers, hardware video editing consoles, and vinyl record components. Some items seem to be half scams and half real and eBay doesn't do a damn thing to stop people from listing fake items. They rely on users to constantly scream at eBay to take the fake listings down. I have to persist often to get eBay to take down the endless fake auctions for Pioneer DJ components that are listed day after day and eBay still can't figure out a filter for this problem.
At the end of the day eBay is still great (minus the shipping charges).
There's no way to tell through the serial #'s? Personally, I would only use ebay to buy a beginner guitar. For higher end guitars like PRS or Gibson, I'd probably try Musiciansfriend.com. If you're gonna spend the money, why not spring a little more for a brand new guitar?
I see hundreds of MMO (ok, WoW) gold listings every day, and if ebay claims 100% vero compliance that probably accounts for a lion's share of their statistics. Blizzard aggressively has these taken down, I know because when I auctioned my account they had that taken down even though I was including the game with it (first sale doctrine gives me the right to sell my cds, and I am equally free to expose my account information as I please).
I would have filed a counterclaim, except that by the time ebay removed my auction, it had already closed and the deal was done -- but to comply with vero, they deleted the auction anyway and *refunded my fees* accordingly. So, uh, thanks to Blizzard and ebay!
I'm possibly missing something blindingly obvious here, but what's the benefit of the eBay step in the insurance fraud scam? Just to make it look like they have a more legitimate reason for keeping 8 PS3s in their living room before they were 'robbed'?
Regardless of my opinion on the matter at hand, after 11 years of buying and selling on eBay, it is impossible not to feel satisfaction when they lose a lot of money.
And regardless of the outcome of this, they're losing money right now, or at least not making it hand over fist.
I'm very satisfied. F them!
I was selling some Monavie Active on ebay. Monavie Active is basically a health juice drink that is sold exclusively by Monavie Inc. so it is in Monavie's interest to stop people from selling Monaive active on ebay because they have a monopoly over the product. So they report every listing they find on ebay as Infringing on their copyright and ebay automatically takes it down. Now this wouldn't be so bad if ebay had good support but ebay in my opinion is lacking in that area. You can do the whole live chat thing but the reps on that have no influence over the VERO program. You have to reach them by a hidden form on their site and then you get an email address (rswebhelp@ebay.com) All you'll get from talking to them is that you have to contact the company that filed the infringement (Monavie) to resolve it. Now remember Monavie has a monopoly over their product and so their is no way they'll resolve this with me peacefully. Now I admit that ebay is just trying to play nice with everybody but they should really do more to support the little guy when he starts getting squished by the big Corps.
there is no way to know if its real or not.
If that's the case, sounds pretty good to me. I'm going to start doing my shopping on eBay. ;)
I don't consider myself much of a capitalist, but I find it interesting that a company can have a product that another company reproduces for less (at the same quality), but can't compete with them. Why is that? I know regulations help level the playing field, but in a cold way, the consumer wins if another company can create the same product for less. I think typically though, products like this are of inferior quality - maybe the product itself, support etc...
Fact: Everything I say is fiction.
This is why I hardly ever buy on eBay any more (sell yes, buy no). I buy stuff on craigslist.org precisely because I can inspect stuff myself first hand before buying, and if I'm stupid enough (or want) to buy a fake, that's my problem. Not surprisingly, eBay owns 25 percent of craigslist now, but buying remotely, sight unseen, from "discount sellers" though eBay is, IMHO synonymous with asking to get ripped off. Its just too easy, as other posters have pointed out, to rip people off, and neither eBay nor Paypal do a damn thing about it.
Most buyers can't tell the difference. For the most part, they are getting a bargain because they think it is a Rolex or Louis Vutton, but it isn't really. They aren't paying for the real thing.
In a few cases, they buyer ends up feeling like a sucker because they try to sell their "bargain" to someone that knows the difference. So instead of making 10x their original investment, they learn their watch isn't "real". Well, it tells time, right?
Because of the price difference, the overpriced only-for-the-rich names are going to disappear. So in 10 years when you can't buy a new (real) Rolex anymore for $8,000 but you can buy all the fake ones you want for $80. Who is the loser here? Maybe the rich folks, but I can't see anyone on Slashdot giving a rat's ass about that.
With the Internet you make the distribution of these goods almost untracable, so there is no risk to the seller from the police. The police being used to enforce the only-for-the-rich prices for brand names. So you get a Rolex for $80 and it will last just as long as any other $80 watch - but it says Rolex on it. If your ego requires you to have brand names, this lets you do it without paying vastly inflated prices for useless names. The name doesn't make it any better, after all.
A common scam that I've fallen victim to on at least one occasion when buying synthesizers on Ebay is the "It must have broken during transit" scam - the seller knows that an item is nonfunctional but sells it at full price, and before it ships puts a little exterior damage on it to make it look like it was damaged in shipping when really the thing was a basket-case to begin with. The seller and Paypal then instruct you to bug UPS for insurance money, which you will never get because the package itself generally has no signs of damage. I had one synthesizer that was in "fully functional condition" arrive with two broken keys - sure, that MIGHT have happened in transit, but what about the burned traces in the power supply? I always give preference to sellers now who have gone to the effort to make YouTube videos of their gear to show that it is in good operating condition.
It is very difficult for a purchaser to effectively file a counterfeit item report with Ebay. Realistically, they must get the assistance of the manufacturer to do so. I got stung when I purchased what was listed as an OEM part that had been out-of-production for a couple of years. The manufacturer was not interested in pursuing the matter. I would have had to pay for a qualified expert witness to examine the item and report on the item. The seller had admitted to me that they were having the items manufactured in China but labeled as being made by a reputable multinational firm in Japan. Even with my status of being a licensed PI and having some "Expertise" in the field of this part, Ebay refused to take substantive action. Paypal reversed the charges but that was it. Pursuing the matter with Customs and USPS is difficult without the assistance of the legitimate manufacturer. But they weren't interested in working a part that has been out-of-production for a couple of years. The Ebay power seller is still in operation. A close examination of his feedback shows that some others have been unhappy with the quality of his items, but "Happy" because he did refund the money when they complained and returned the item. I didn't want to ship contraband back to him as it is illegal to do so. I still hold the item and plan to sue him in civil court.
Let's say that the Nintendo Wii retails for $250. But you were going to sell them on eBay for $450 a piece and because of retail scarcity people bought them. Then you go through the scam I outlined above. When you make a claim with your insurance company, because people have used PayPal to transfer you $450, you can try to claim a loss of $450 instead of the loss of replacing a $250 machine.
Look at the rate at which they've been able to get Scientology stuff banned from eBay (such as 100% legit e-meters)... Because if there's a used market, the CoS doesn't make as much money.
My blog: http://www.seebs.net/log/ --- My iPhone/iPad app: http://www.seebs.net/seebsfrac/
They then list the consoles on eBay and sell them to people taking the money from PayPal. But, because they've already sold the item off for cash, they tell the person who sent them money over PayPal that they will get a refund. They then call the cops, say that they have been robbed and someone stole several dozen expensive electronic components from them and then they recover whatever homeowners or rental insurance covers stolen property.
Lately, whenever I've sold something on PayPal that's been more than $50, PayPal has held the money in escrow until either the buyer gives me positive feedback, the shipping company confirms the package was delivered, or 30 days goes by. It's happened to me at least 6 times in the last couple of months. It's not annoying, but it does cause a small delay in getting my money.
As for telling the police about the stolen goods and getting an insurance claim, I'd have to imagine someone can only try that once in their life. I'd like to think that the second time, the police might suspect something and the insurance company would laugh at you.
-David
Regarding counterfeit fashion gear, the problem is more the fact no one cares. They know it's counterfeit and just care about what people see them wearing.
Like someone is actually going to believe that a person driving some old little hatchback car with a job at Tesco actually bought a real Fendi bag.
My complaint is how hard it is to buy real video games thanks to all the junk from Hong Kong.
Maybe it's improved but if ever I go back to buy a game from ebay I will flat out refuse to buy from anyone that looks like their image came from a google search.
>>>The seller and Paypal then instruct you to bug UPS for insurance money
Bzzzz. Wrong, wrong, wrong. The seller might tell you to get insurance, but Paypal always gives the exact-same answer: "Return to seller." You can then provide the delivery confirmation/tracking number to paypal and they will refund all your money. Or you can provide it to your credit card, and they will do the same.
Also, "it got damaged during shipping" is NOT an excuse for a seller. The seller is responsible for ALL damage, whether he did it himself or the mailman did it, therefore the seller must refund your money. And if he doesn't paypal or your credit card will do it.
I once received a cracked LCD screen, and the seller tried to pulled the "I'm not responsible" and "go claim insurance" scam. I said "WRONG" and immediately returned the screen. The seller ended-up losing the sale, having to pay additional postage for delivery (since I deliberately mailed without sufficient stamps), and got a nasty negative.
>>>I had one synthesizer that was in "fully functional condition" arrive with two broken keys - sure, that MIGHT have happened in transit
Too bad, so sad. It's still the seller's responsibility to deliver the item advertised.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Of course, today it often works out like this: Company A pays Xa to market a trademark. Company A needs something to sell to recoup marketing costs, and know their campaign generate an average product purchase rate of Za. Company A buys generic goods from production company B for Ya. Company A sets price of product to (Xa/Za)+Ya.
Well, that often comes along with it, but in principle it's not necessary unless the original design cost is so low that it is close to the design cost of copying.
Amortized of the series we're talking about design cost is negligible, even if you actually do it inhouse; design isn't a very people-intensive area. Marketing, lobbying and channel control would be far more expensive.
I suspect trademarks are only slightly less damaging to the economy than patents and copyright, but at least their damage isn't infinite as far as to preventing others from distributing similar goods.
There are also reasonable ways to counter the worst of the damage; one could require goods to be designer, producer and product ID marked to be protected by trademarks, ie, if the trademark owner outsources design and production, then customers can buy the exact same unmarked good by buying no-name product ID referenced goods, basically bypassing the scam.