Faking it at online auctions

More than 85% of the world's online population used the internet to make a purchase last year.

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By  Vineetha Menon Published  July 21, 2008

More than 85 percent of the world's online population used the internet to make a purchase last year, with the top online retailer being recognized as eBay, according to a Nielson survey.

Last week, the online auction giant won a landmark lawsuit against Tiffany that had dragged on for years. In 2004, Tiffany & Co. sued eBay stating that items listed for sale as genuine Tiffany products on the site were actually fakes. The federal judge ruled that eBay can't be held liable for trademark infringement and that companies like Tiffany are responsible for policing their trademarks online, not auction platforms.

While eBay may have been victorious in this case, they still have to fork over more than $61 million in a different case. EBay was ordered to pay the amount last month after LVMH Moet Hennessy Louis Vuitton S.A. complained that it was hurt by the sale of counterfeit perfumes, bags and clothes through the auction website. EBay is currently appealing that ruling.

As the illegal trade of counterfeit goods continues, taking measures to curb its spread online and protecting buyers have now taken focus. EBay says it spends tens of millions every year to combat counterfeiting, suspending and blocking users that are found selling, or are suspected of selling, fake goods. In 2007 alone, eBay threw out 50,000 sellers and blocked 40,000 previously suspended sellers from returning.

"If a crime was coordinated and committed over the telephone, what responsibility is placed on the phone company that provided the service?" says Sameh A. M. Lutfi, sales and marketing manager of Souq.com, in response to the eBay ruling. "The responsibility of the legality of products is on the seller," he added.

Souq.com, a Maktoob Group company, is the leading auction website in the region with 130,000 registered users. They have strict policies in place banning trade of counterfeit items or any items that infringe on intellectual property rights through Souq.com. A dedicated team monitors the website routinely, removing any infringing items that are found.

The company does occasionally get contacted by buyers with complaints that they've purchased a possible counterfeit item.

"In such cases, and in our capacity as an escrow service, we receive the item back from the buyer and have it tested with a material expert. For example, a watch that is suspected of being a counterfeit will be taken to the dealer/agent and tested and certified."

"If the test reveals that the item is, in fact, a counterfeit, then the buyer receives a refund and the seller receives a warning to not repeat the offence. The sellers account is suspended for a limited time period as a penalty. If the offence is repeated by the same seller again, their account will be suspended indefinitely and they become barred from using the Souq services. If the test and certification confirms that the item is in fact legitimate, then the buyer can proceed with their purchase with peace of mind knowing that their purchase was in fact legitimate in every way." clarified Lutfi.

With a zero-tolerance for counterfeits of any kind, whether clearly stated as ‘fake' or otherwise, Lutfi admitted that "with over 40,000 items on the site at any given time (and growing) and without the assistance of the intellectual property owners, not all counterfeits can realistically be identified and removed."

As long as there is a demand for cheap and fake goods, the counterfeit trade shows no signs of abating. When asked whether Souq.com would consider taking action against buyers of counterfeit goods in the future, Lutfi responded that "if it's available, anyone could potentially be a buyer of a fake item...and stopping buyers from accessing the site will mean that our legitimate sellers will be deprived of legitimate sales to those same buyers."

He believes that the key to resolving this matter would be to tackle it at the source -"it's the suppliers/providers of these offending products that will always be unwelcome."

3342 days ago
online auctions

Truly this is one of most prolific problems that exist and only the savvy auction surfers can avoid this treachery. For the casual enthusiasts looking for a bargain it is a nightmare about to happen.

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