eBay: Helping Brands to Combat Counterfeit Goods
When someone outbids you on eBay, it can be mildly annoying.
But winning at auction, paying a good price and having the product delivered to your door, only to find you have been duped and bought a counterfeit good, is even more irritating.
Behind the scenes at eBay, the company is working hard to stamp out this type of behavior, but the e-commerce platform faces a constant battle against counterfeiters.
“Everything can be counterfeited—I can’t point to a specific product,” says Julien Dudouit, Global Brand Manager at eBay, when asked about the most commonly counterfeited goods on the platform.
Despite this challenge, as well as the “proactive” nature of criminals and the fact that counterfeits are increasing in quality and price, Mr. Dudouit says the number of counterfeit goods sold on eBay is a small fraction of the overall daily sales.
To keep this fraction small, eBay invests a lot of time and resources in combating fake goods on its site.
“Counterfeits are not welcome on eBay,” says Mr. Dudouit. “We have worked for 20 years to ensure a safe platform to trade, using a combination of sophisticated tools, enforcement, and strong relationships with brand owners, law enforcement, and retailers to come together to fight counterfeits.
“We want to create a strong shopping experience for consumers.”
One of the central pillars in eBay’s anticounterfeiting strategy is the Verified Rights Owner Program, launched in 1998. It allows right owners to report listings that infringe their rights, with eBay taking subsequent action against the listing and seller where necessary.
“We have more than 45,000 brands in the program, from Fortune Global 500 companies to industry associations and small businesses,” Mr. Dudouit explains.
Underpinning the program’s success are strong relationships with brand owners.
“Partnerships are important as the brands are the experts—they know their products,” he says.
“We need to make sure the brand owners have the tools and knowledge to efficiently report infringing items on the platform, so we do anything we can on our side to detect counterfeits.”
After all, notes Mr. Dudouit, while eBay wants to protect consumers and make the platform a safe place to trade, the company itself is a valuable brand and has first-hand experience of having to protect its rights worldwide.
eBay also has a dedicated team working with law enforcement to bring down sellers of fake goods.
According to Mr. Dudouit, one of the best examples of collaboration against counterfeits is a memorandum of understanding (MoU) signed in 2011 between the European Commission and a host of companies, including eBay, Burberry, Adidas, and Amazon.
“The MoU allows brands to communicate and share information about trends that they and platforms are seeing. It opens the communications channel.
“It’s a very collaborative approach to finding practical solutions to IP enforcement, and we believe it has been very beneficial for all parties involved.”
Along with relationships with third parties, eBay seeks to educate its community about counterfeits by encouraging brands to create profiles where people can view the IP rights that the companies own.
“We have found education to be critical,” Mr. Dudouit says.
Fighting on the Front Line
With all the work being done to fight counterfeit goods, is too much responsibility being heaped on online intermediaries such as eBay, which are often on the front line?
“It is not a responsibility, it’s the right thing to do; it’s something we care about,” says Mr. Dudouit.
The difficulty of being caught in the middle has manifested itself through litigation in the past, with eBay being targeted over liability for fake products. In its 2017 Annual Report, filed with the U.S. Securities and Exchange Commission, the company discusses the problem in more detail.
“In a number of circumstances, third parties, including government regulators and law enforcement officials, have alleged that our services aid and abet violations of certain laws, including laws regarding the sale of counterfeit items, laws restricting or prohibiting the transferability (and by extension, the resale) of digital goods (e.g., event tickets, books, music and software), the fencing of stolen goods, selective distribution channel laws, customs laws, distance selling laws, anti-scalping laws with respect to the resale of tickets, and the sale of items outside of the United States that are regulated by U.S. export controls.”
The report goes on to say that in Turkey, local prosecutors and courts are investigating eBay’s liability for allegedly illegal actions by users of the company’s Turkish marketplace, GittiGidiyor.
“In accordance with local law and custom, they have indicted one or more members of the board of directors of our local Turkish subsidiary. We intend to defend vigorously against any such actions and a growing number of these cases have been dismissed by the relevant courts.”
The filing also notes that Tiffany & Co, Rolex, Louis Vuitton, and Christian Dior, in an effort to protect their rights, are just some of the brands to have either threatened or filed litigation against eBay over IP infringement, including counterfeit items, and the company has paid “substantial amounts in connection with resolving certain trademark and copyright suits.”
For now, while courts remain split over who should be held responsible when it comes to online counterfeits, it seems both brands and companies such as eBay are sometimes stuck between a rock and a hard place.
Box: Julien Dudouit’s colleague Louise Delcroix, Head of IP, Asia-Pacific at eBay, will be speaking in CT20 Strategies for Online Brand Protection on Tuesday, from 11:45am to 1:00pm, about the different measures eBay implements to prevent the sale of counterfeit products.
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