“eBay ordered to pay damages in sale of fake goods”

That’s the headline, the country is France.  Is there any efficiency rationale for this decision?  The alternative equilibrium involves a fair number of fakes, some good discounts for real items, an overconcentration of trading activity is easily verifiable or not worth faking items, and of course a diminution in the value of brand names.  The latter effect may even be welfare-improving once you consider price discrimination and the association of brand names with monopoly rents.  You can put the penalty on the seller but how is eBay to detect possible fakes?  Buy and inspect the wares?  Shut down trade in any fakeable item?  I would think it is also easy enough to "buy fakes" from your buddy, in essence keep the cash, give him a percentage, and then sue eBay for the "loss."  If the owner of the brand can sue would not the French court consider a suit from the buyer of the fakes as well?


Actually eBay did shut down an auction my wife had of a fake LV purse last year, so they DO CURRENTLY engage in policing. Hey, it's France; it's like expecting a rational judicial decision in Looney Tunes Land.

I interned at a women's accessories manufacturer in their legal department (not one involved in the suit, from what I can tell). Part of our job duties entailed searching through eBay for what we thought were fakes (and typically, it was easy to spot with as little as a day's training), email eBay via their VERO program, rinse, repeat.

What's interesting is that the number of pure counterfeiters was very low. What I mean by that is simply that each "counterfeiter" sold, on average, under three or four fake handbags over the course of, say, 3 months. Those who sold multiple counterfeits were easily identified and shut down, unlikely to return anytime soon. So basically, there are no arch criminals who are (a) selling counterfeits (b) on eBay. More likely -- and I think this is obvious -- there's a handful of downstream providers who are making and selling these fakes; those fakes end up in then hands of various women across the country; and sooner or later a percentage of them end up on eBay via a number of channels.

But if there are few, if any, eBay sellers whose business is reliant on counterfeits to any appreciable degree. And these eBay sellers are obtaining the bags via tag sales, estate sales, at thrift shops, in association with consignment shops, etc. That is, they're picking up used bags and making a best (albeit bad) guess as to the validity of the logo on the bag; they are *not* going to Canal Street in NYC and knowingly buying a fake Louis Vuitton handbag (or 50).

So I wonder: is counterfeiting of women's accessories any worse today than it was pre-eBay? It seems the answer is "not appreciably." The bags for sale on eBay, by and large, were purchased used. The consumer who originally purchased the bag almost certainly did not calculate or internalize the re-sale value of that bag when purchasing it, so it's unlikely that the demand for counterfeit handbags went up because of eBay. The person selling the bag on eBay, again, probably isn't knowingly or appreciably in the counterfeiting business, so that person also has a minimal effect on the demand for counterfeits.

This isn't to say that, for brands like LV, fakes on eBay are a non-issue -- that's a topic for another day. But the real problem here for the brands isn't eBay, and that's pretty clear.

LVMH ... successfully challenged eBay for a second time in the French court, arguing that 90 percent of the Louis Vuitton bags and Dior perfumes sold on eBay are fakes.

If it is true that 90% of the Louis Vuitton bags and Dior perfumes on eBay are fakes, shutting down the trade in these items on eBay may be reasonable.

I'm not understanding how counterfeiting name-brand products is welfare-reducing at all, provided the counterfeit product functions more or less the same as the "genuine" article. We aren't talking about sellers copying some sort of costly IP. I suppose the counterfeiters are free-riding off of the marketing of the main company, but so what? These are signals in the zero-sum game of social status.

Makes one wonder what the wealthy would do if they no longer had the ability to distinguish themselves from plebs by purchasing expensive, trademarked name brands.

They hate America period

As Dan says, the counterfeit bags are identifiable. I doubt there are many people buying counterfeit bags on Ebay without realizing they are counterfeit. The counterfeit bags are priced differently from the genuine articles and are recognizable with some research form their pictures.

EBay could require sellers of commonly counterfeited goods to post a bond of say twice the average sale price if it's an auction or twice the list price if it's a fixed price listing. If buyers suspected they got a fake they could send the bag to eBay, Luis Vitton, or some other certified inspection shop. If the bag was a fake the buyer would get a 200% refund and the fake would be destroyed. Once a merchant sells so many fakes he's banned. Even if buyers know they are getting a fake they still have an incentive to report fakes.

The downside is perhaps everyone will want their bag checked. However after awhile you should stop seeing that many counterfiet goods, and if the buyers pay some nominal price, such as shipping, not all goods will be sent for inspection.

Strange. Hollywood has engaged in a massive campaign against counterfeit videos, the US government has joined in especially against China, and French luxury goods makers are wrong in protecting their trademark because the counterfeits are sold through a US owned business ?

I have got news for you: if you purchase counterfeits on that trip to Asia and bring them over a border in any developed country, you will face a massive fine and, possibly, a jail sentence. "Sorry, I had no idea that Rolex I bought for 50 dollars was a fake" is an excuse that doesn't cut it with any customs officer anywhere.

Ebay know what they are doing, are very good at it, and can certainly correct this problem easily. In the meantime French law applies in France and there is no free lunch.

Mes Salutations

Je suis Mr Noel Chiffonne mario,ancien agent de police à l'île Maurice.
Durant ma carriere de policier,j'ai eu à effectuer des trafics illégales dans le domaine de la drogue et des armes .En ce moment là,tout mes virements bancaire se faisaient dans mon compte bancaire dans un pays de l'Afrique de l'ouest appelé le Benin à l'aide de l'ex Président de la république Générale "MATHIEU KEREKOU" qui à chaque virement avait son pourcentage.
Suite à mon état critique due au cancer de poumon,il m'est été conseillé par le père de mon église après confession de faire une charité avec une grande partie de ce fonds dont je dispose dans cette banque Beninoise à de différente personnes dans presque tout les pays du monde afin que le seigneur pardonne mes péchés.
C'est ainsi que je me sert du net pour contacter les chanceux qui bénéficieront gratuitement d'un chèque de 45.000.00€ (Quarente Cinq mille Euro) dont vous faites partie. Au nom du seigneur créateur du ciel et de la terre,cette somme vous aidera à réglementer une bonne partie de vos problèmes financiers.
Je vous annonce que j'ai eu à contacter un avocat financier du bénin du nom de Me AGBO François . Ce dernier ayant une bonne foie a eu à signé un contrat d'accord de partenariat financier avec moi. Je vous annonce que vous n'aurez pas à payé son salaire honoraire en avance car il a été dit au numero 05 de la page 03 du contrat que:
05- Les tarifs total des honoraires de course s'élèveront à 650€ et ne doivent être payés par le bénéficiaire après la réception du chèque et l'échange entre les deux banques.
Je vous prie de prendre contact avec cet avocat du nom de Me AGBO François au BÉNIN pour réclamer votre chèque car je part pour les USA dès ce soir pour continuer mes soins.
Au nom de Dieu créateur du ciel et de la terre,je vous prie d'accepter ce don que je vous offre du fonds du cŠ“ur car j'ai été conseillé par le curé de l'église "CATHOLIQUE" de Port-Louis.
Me AGBO François
Mail: cabinet.davocat_agbo@yahoo.co.uk
Très sincèrement


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