December 4th, 2007

Tiffany vs Ebay: Who Gets the knockout on the Knockoffs??

There are enough talking points in the lawsuit brought by Tiffany&Co. against Ebay to teach a number of college courses in marketing, econ, law & ethics.  The crux of the complaint is that Ebay hasn’t and doesn’t police its auctions to Tiffany’s satisfaction.  They feel they are suffering brand dilution from all the counterfeit goods being sold on the auction site.  But Ebay has from its inception had the attitude that it provides the venue, but keeping out the counterfeit goods is not really their responsibility.  Tiffany disagrees of course and wants Ebay to be called to account and forced to change.

What I find interesting in the 3 or 4 years this suit has been meandering along, Ebay has seemingly changed its operational oversight very little.  Which makes you wonder if they’re being smart or arrogant about the outcome of this suit.  Tiffany is not the only luxury goods provider experiencing this problem; so will Ebay be vulnerable to other claims from Cartier,  Louis Vutton, Hermes, Cartier and all the other designers you can buy? Or will Judge Sullivan write the decision in such a way as to provide satisfaction to T&C without forcing Ebay to overhaul it’s business model?  Counterfeit goods show up anywhere things are sold so who has the ultimate responsibility to protect the “brand” especially since so many of the designer houses participate in their own brand dilution by selling their own lines of factory outlet goods.

Like I said there is enough material here for a number of tangent discussions, but focusing on Ebay’s attitude that it has little responsibility in overseeing the honesty in its sellers is why I’ve never been a fan of the site.  Over the years too many stories have been told to show that crooks are found by the consumers vs. the company, and when they’re outed Ebay takes forever to act on the realization.  We have experienced the problem of fraudulent sellers on DiamondRing but unlike Ebay we work to reject questionable sellers/goods before they post.  Swift action is something Ebay doesn’t do, and it seems the thing is designed to give the dishonest sellers the advantage.  I lost count of how many times one of our members found DiamondRing’s goods pictured on Ebay in a fraudulent auction; and the hoops the seller had to jump through to prove it was perplexing.

But I digress… It remains to be seen who will win this.  It may be that Ebay will lose because it’s its time as a monolith to be taken down a beg or two, or maybe Judge Sullivan will decide that Tiffany, and all the others in line behind them, will have to continue to rely on the in-house teams they already have to do what Ebay refuses to do with counterfeit goods.  Even when the decision is handed down the story won’t be over…Pass the popcorn!!

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