Tuesday, August 22, 2006

Auctioneer, Heal Thyself!

It's not easy being the world's largest flea-market. Just like their trestle-table and tarp brethren, eBay suffers from sellers hawking fakes. eBay has come under attack several times recently from companies (such as Tiffany's) and trade groups (such as the French Luxury Manufacturers), upset at the fact that eBay makes a commission on the sale of counterfeit goods. The law is murky grey here - after all, are newspapers liable for the goods sold in their classifieds? eBay provides brand owners tools (called VeRO) to shut down suspicious auctions. "Not enough", say the brand owners, who want more proactive measures.
Leather goods maker Louis Vuitton, a unit of LVMH, the world's largest luxury goods group, last year found 235,000 examples of counterfeit articles on 340 eBay pages. In one case, it tracked more than 100 copies of the same article being sold within one hour, said Jamet, who is also a senior executive at LVMH.

In 2004, Tiffany secretly purchased about 200 items from eBay in its investigation of how the company was dealing with the thousands of pieces of counterfeit Tiffany jewelry. The jeweler found that three out of four pieces were fakes.

But is it feasible that eBay (or Yahoo, or classifieds for that matter) can authenticate the 60 million products that their members sell on their sites? Then there's alibaba.com, a positive Alladin's cave of products.

As eBay and other online auctions grow, a better method for easily authenticating products is required - certainly if buyers are to trust these sites.