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eBay held accountable for being a 'fence' for counterfeit goods
Submitted by Scott Cleland on Tue, 2008-07-01 12:20
eBay was just found guilty, again, of being a "fence" for counterfeit goods, but nevertheless remains unrepentant vowing to fight against "uncompetitive commercial practices at the expense of consumer choice."
- The eBayopoly, with 95% share of the online auction market per Jupiter Research, obviously has minimal competitive pressure to run a business that respects the rule of law, and every incentive, with its cut-of-goods-sold-business-model, to look the other way in the sale of counterfeit goods on eBay.
- At core eBay continues to ethically and politically side with illegal counterfeiters against property owners because counterfeiters provide "consumer choice" to the producers of valuable goods and exclusive brands.
- Seems like eBay yearns to force the utopian new "economics of abundance" of the Internet on the physical world's free-market economics of scarcity.
- How convenient! The eBayopoly with 95% share of auctions, squeals loudly when any competitor dares to try an encroach on eBay's market dominance -- but criticizes other businesses for limiting consumer choice when by design they pursue a perfectly legal, acceptable, and time-honored -- scarcity-driven-business-model -- i.e an exclusive, high-end brand strategy.
- Essentially, eBay is showing its fundamental bias against the economics of scarcity even when the economics of scarcity are supported by the rule of law, free markets, ethical business practices and respect for property.
- Not only does eBay seek to leverage its monopoly power to jam a new economic model of "abundance" on others downstream, it has an equally unethical view about eBay's larger responsibility as a business.
- eBay has assiduously tried to shift the responsibility for enforcement to the victims of counterfeiting.
- eBay's position is that victims of counterfeiting should monitor all the millions of transactions on eBay to find instances of counterfeiting and notify eBay so they can act. eBay's policy treats the counterfeit victims as the problem, not the aggrieved party!
- This Internet-get-out-of-jail-free ethos, (that Google shares in expecting Viacom to monitor YouTube for copyright violations, not Google) would be like an owner of a big enclosed shopping mall taking the position that it has no responsbility for providing security, and that victims are on their own -- they will only get involved if victims have already been mugged, beaten or otherwise victimized.
This is part of a broader pattern for eBay:
- It was widely reported today that eBay was ordered by a French court to pay ~$60m to LVMH, a French luxury goods maker, because eBay was found to be "guilty" of "negligence" in allowing the sale of counterfeit goods on their site.
- This is no isolated incident or ruling.
- Another French court ordered eBay to pay Hermes in a similar decision.
- Germany's Federal Supreme Court ruled against eBay for the same negligence in a Rolex case.
- Tiffany has brought the U.S. equivalent of this case and it is still pending.
Bottom line: eBay has a different ethic than responsible businesses. Victims of crime are on their own...