eBay Vows to Fight Following Overreach by LVMH

dimesOn 06.30.2008 at 1:04 pm Said:

@Chris -

I’m not familiar with French law, but in the US, the “first sale doctrine” would prevent Fox from prohibiting owners of its products from reselling them on eBay.

There was a court ruling in CA a couple of weeks ago over this very issue - Universal Music sued an eBay seller for selling promotional CD’s on eBay, and lost.

From the news report:
“The “first sale” doctrine says that once the copyright owner sells or gives away a copy of a CD, DVD, or book, the recipient is entitled to resell that copy without further permission from the copyright owner.

“This is a very important ruling for consumers, and not just those who buy or sell used CDs,” said Corynne McSherry, staff attorney at the Electronic Frontier Foundation, which represented defendant Troy Augusto.

“The right of first sale also protects libraries, used bookstores, and businesses that rent movies and videogames. This ruling affirms and protects the traditional balance between the rights of copyright owners and the rights of the public.”

http://tinyurl.com/5eurez

Does France have a similar law protecting resellers?

Randy SmytheOn 06.30.2008 at 1:12 pm Said:

@Chris@tamebay,

Many of us realize this, there will certainly be “dolphins caught up in the nets” Luxury items may be completely blocked on eBay even from legitimate sellers.

Is it not the right of a manufacturuer to do everything in their power to protect their brand?

Nobody needs to worry about commodities like DVD’s or stuff that Buy.com sells.

eBay is not fighting this for the small number of dolphins, no matter what they say publicly. eBay is fighting this for eBay.

I dolphins are getting caught in the nets with eBay current policies what are a few more dolphins?

Patricia1On 06.30.2008 at 1:25 pm Said:

I’m not disturbed by this. As the sole manufacturer of everything I sell I can actually see the manufacturers’ point - plus it was long overdue for somebody to put the big bully in its place…though I’m sure they’ll figure out some way to beat this out of their sellers

MechelleOn 06.30.2008 at 1:31 pm Said:

@Richard

I read this article too, and here is my response

[i][b]“EBay is an Internet company that has found a way to make money by offering a product — its online auction platform — that hadn’t existed before. So quick, someone fetch the antitrust regulators.”[/b][/i]

What are you talking about??? There is nothing new in eBay’s online auction platform availability - it has existed for 12 years- what exactly are you arguing? What does this have to do with eBay’s Tying arrangement with PayPal??

So, this is where you at least mention the relevant information to your headline

[i][b]“The Australian Competition and Consumer Commission thinks the move is anticompetitive because eBay’s position as Australia’s “leading online marketplace” means that shutting out other payment methods would hobble them unfairly. So on June 12, the Commission issued a draft ruling that would bar eBay from going ahead with its plan.”
[/b][/i]

Yes, and it is a good thing that the Australian CCC is intelligent enough to see the wolf in sheep clothing that eBay is. Only a fool who has not taken even one full minute to research the issue and understand all of the variables involved with PayPal only and the consumer protections commanded by the Australian Government.

It is not an issue with eBay being the leading online marketplace- nor is it about the PayPal only within that leading online marketplace. There are 2 problems with eBay’s PayPal only scheme-

1) eBay members- sellers will be forced to use eBay’s PayPal product if they want to use eBay’s online auction platform product- clear cut tying arrangement, which is anti-competitive business practices.

A) The absurdity of this if you don’t like it get out of the pool attitude is mind boggling. If the issue were only whether or not you choose to buy a shirt from a department store and they were the only store who had the item we could make the choice to not shop at that store and it will not negatively impact the state of the market- because no consumer of that department store will lose their income if they decide not to buy from that department store. Choosing not to buy from a department store is in no way a parallel to choosing not to sell on eBay.

eBay’s bragging
-
[b]“In an interview, Whitman, 51, said the 1.3 million figure includes 750,000 people in the U.S. who (“make most, if not, all of their living selling on EBay.””.) McCain’s EBay Model for Jobs Finds Few Buyers Among Economists: By Hans Nichols, June 24 (Bloomberg)[/b]

Are you so base that you believe 1.3 million eBay users can decide today right now to quit eBay altogether? Are you so ignorant that you actually believe that these 1.3 million people who rely on their eBay business as their primary or secondary source of income have the luxury of hopping into an unstable up and coming (maybe) online auction venue? EBay has a monopoly with its online auction platform as it is - they suck out insane fees for their sub-par service as it is. That just isn’t enough so they are intent on abusing their customer base that they know damn well 1.3 million of them are reliant on their eBay income.

B)They are exploiting their power in the online auction market, and the only reason they have yet to make an attempt to pursue a legal license for the enforcement of PayPal only here in the US is because they do not have to- we (US consumers) have already essentially conformed to a PayPal only system. eBay’s ban on Google checkout the only other online payment method that could severely damage PayPal’s market potential and the other payment method that was convenient for consumers, but essentially just for looks was BidPay , which abruptly shut down January 2008. Money orders or cashier’s checks are to much of a hassle to make any significant contribution to the seller so are virtually moot in the argument. We don’t do direct bank deposits. We are bound to PayPal due to eBay’s ban of Google and the American culture.

C)eBay’s brain wash of buyers convincing them that eBay sellers are all crooks and cons and to protect themselves from these “bad people/sellers” they should use PayPal the only safe payment method, with the back end threat of if you do get screwed don’t come whining to us message they effectively terrorize the buying members into using PayPal and as consequence sellers are essentially locked into a tying arrangement driven by eBay’s psychological terror of eBay members ultimately leaving these 1.3 million individuals who rely on their eBay income to use PayPal as a payment method if they actually want to sell anything. The new policy forcing anyone with less than 100 feedback only use PayPal as an accepted payment method is only to continue this and increase the use of PayPal above the only other options of payment (money orders, cashier’s checks, and personal merchant accounts). By the time the new seller rack up enough feedback to offer other methods they will be so entrenched in the system it will not be an issue for eBay.

2)So, why does eBay need to attempt a legal immunity from their admitted anti-competitive actions? People ignore or haven’t picked up on the fact that eBay requested immunity from Australia’s anti-trust laws. eBay makes no effort to try to hide the fact that they know what they want is illegal, but they are hoping that Australia will treat them as some sort of utility like the power company- it is outrageous. Australians are not as entrenched in the PayPal system as US members are. They have a more competitive (Cheaper & safer) method as an option. I think only 30% of Australians use PayPal that is a lot of fees eBay/PayPal is missing out on.

A)The issue goes beyond the use of PayPal within eBay. The reality is once all eBay members in Australia (estimated 5Billion) are forced open a PayPal account their likelihood of using PayPal for other online transactions increase substantially- this proliferation of PayPal users outside of eBay will continue to grow and may lead to merchants offering PayPal more frequently as a preferred payment method there by reducing the viability of other payment options both within and outside of eBay. This PayPal proliferation has been taking hold in the US ecommerce market with fierce intensity over the past year. I imagine by the end of the year every online US merchant will offer PayPal and because of its convenience the user base will dramatically increasing entrenching the entire ecommerce market in the use of PayPal.

B) In essence eBay is intent on entrenching the Australian consumers into PayPal at the level of use it is in the US- the clear ultimate goal is to entrench the global ecommerce market into the use of PayPal. The role of eBay’s user base is essential for the success of this PayPal dominance model.

[i][b]“ As of December 2007, approximately 1,319,872,109 people worldwide use the Internet, according to Internet World Stats.” (http://en.wikipedia.org/wiki/Global_internet_usage)[/b][/i]

[b]1,319,872,109 eBay users worldwide there is no better tool to get the job done![/b]

[i]This is anti-competitive behavior and the global market needs to pay attention before we are all overcome by the eBay/PayPal and they drive the global ecommerce market into the ground. Next could be the tangible market- would it shock you to see PayPal as a payment option on the Atm/CC terminals at your grocery store, local department stores? What about as auto payment for your household bills? We need to take this situation seriously, because it is profoundly important to stamp this activity now before they start gaining ground in this goal of global payment domination!
[/i]

Tired and upset so hopefully this makes sense

MechelleOn 06.30.2008 at 1:33 pm Said:

that is stupid- you need to put some additional tools into the comment area- bold and italics would be appreciated

MechelleOn 06.30.2008 at 1:54 pm Said:

@Richard

This is a copy of my response to the idiot who wrote that opinion piece in the WSJ not directed at you

MechelleOn 06.30.2008 at 2:10 pm Said:

@Chris @ TameBay

The issue I have is their hypocrisy not the sentiment. The reality is they appear ridiculous with their argument concerning this judgment in light of their actions in Australia.

TonyOn 06.30.2008 at 2:21 pm Said:

I’m in agreement with Chris, people are letting their anger at ebay’s policies get in the way of seeing the bigger picture here, this is a very important issue.

I did read earlier that it was unlikely such a case would be won in the UK, I’m not exactly sure why that’s the case, but it suggests it’s French law more than European law at the heart of this issue.

Forget ebay’s hypcocritical statements, this is about sellers having the right to sell products they own, it’s an important principle and I support ebay in their stance in launching an appeal. This doesn’t mean I support ebay’s restrictive practices, but people need to look at each case on its own merits.

sandiOn 06.30.2008 at 2:35 pm Said:

It’s about giving manufacturers the right (or not) to decide which channels their products can be sold in and banning seller from reselling legitimate goods, obtained legally, in secondary (or gray) markets.

Sorry but I think they have that right. It’s their product, it’s their marketing plan, and it’s their name. If they want to limit who can sell their product they have the right to do so, they are allowed to set their own prices. It would only fall into a problem if all the purse manufacturers got together and set prices together.. I doubt seriously if any of these companies wanted to put barriers up against those who purchased their items legitimately, but they were forced into this corner by ebay.

The companies in question have spent large amounts of monies creating the prestige of their brands, how could they let ebay devalue that image? No business person in their right mind would do anything different.

The alternative was to have 24/7/365 employees monitoring every single listing. Why is it their job?? Ebay is the one who makes money, it is their responsibility to police itself, I would think ensuring fakes not being allowed would be a critical part of that great ”buyer experience”. They have left the job to sellers, who they have been kicking around as if they were nothing and the Vero members who have to spend resources to hire staff. As an owner for some of these brands, I don’t want my purse, watch or sunglasses devalued by ebay.

I own a company, twice in 20 years I “fired” a client, my right. I happen to wear Dior perfume, I understand the cost, and to me it is worth that cost. I want to walk into a store and know I am getting what I pay handsomely.

If one does not like the policy of Rolex, LVMH, they can buy alternate brands.

Reality, had ebay done its job to begin with, would any of these companies have felt threatened their brand was being devalued? Yes, you can point to the suitcase Rolexes on NYC street corners, etc. But NONE of them had the massive/global effect ebay did.

Ebay created the brand of “the place to get counterfeits”. I can relate to not wanting one’s product attached to such a description. EBay apparently thought they were above the law. Today’s ruling is a reminder ebay must adhere to the same laws as everyone else/

sandiOn 06.30.2008 at 2:40 pm Said:

but it suggests it’s French law more than European law at the heart of this issue.

European countries share many laws, this happens to be one of them. This ruling does not impact just France.

MechelleOn 06.30.2008 at 3:11 pm Said:

I think the message of the judgment is to inform eBay they are in fact responsible for what takes place on its “venue”. That the “venue” argument is insufficient relative to their neglecting to protect consumers and respect the integrity of the Brand. I doubt - matter of fact I know that eBay has issues with other sites using what they believe can easily be assumed by the public as being associated with the eBay/PayPal brand. Granted their objection seems to be aligned with hiding truths of the experience members have had with either or both eBay/PayPal.

Though I do find eBay’s argument over this issue and the other situation with the commerce laws in Europe absurd considering their current behavior. However, I do believe that if I purchase something it is at my discretion to do what I choose to do with it regardless of whether or not the manufacturer wants. Sell it on eBay, Yard sale, flea market, or throw it away it is my right (in the US) and these manufacturers are just going to have to deal with it.

Again, eBay looks ridiculous and they should be actively pursuing counterfeit dealers, but I think they are right concerning an individuals right to sell their own property regardless of the manufacturers feeling concerning the consumers choice right to use their property anyway they choose to.

I really think this message is more about eBay’s negligence and essential assistance in the distribution of counterfeit products and is not so much related to the individuals right to sell. The court said eBay cannot allow these products to be sold on the eBay “venue” they didn’t say individuals don’t have the right to sell their property any where- just by extension not on eBay.

Chris @ TameBayOn 06.30.2008 at 3:47 pm Said:

@Dimes “in the US, the “first sale doctrine” would prevent Fox from prohibiting owners of its products from reselling them on eBay”

And therein lies the problem - If I can buy LVMH products why should they be allowed to prevent me from re-selling them on eBay which is effectively what the court has decreed?

We’re not talking dodgy knocked off products here. We’re talking about the right for you and me to have purchased and want to dispose (or perhaps for pro-sellers purchased specifically to resell) a product.

I fail to see why any manufacturer who’s received the full asking price for their product should then expect to control the resale in the future. It’s absurd!

petewheatOn 06.30.2008 at 4:05 pm Said:

As a person who unknowingly waded into this designer cesspool a while back I have a hard time feeling anything for all parties involved. First off maybe some have tried to sell LV etc. on eBay I can attest to the fact that the high end designer accessories are swarming with people who are obsessed with status as it pertains to authenticity. Most of these people are women who swamp their boards regarding every aspect of every detail to determine if something is fake or real. At the other side (as usual) everyone is trying to steal a great deal way below market price. SO you have greed meeting style and of course with no substance. O.K. I don’t need a lecture on the history of couture in French history. Bottom line anyone who sells or wants to sell in that shark infested water better have some ammunition because corruption is rampant and the manufacturers snobbish over priced strata seeking caste system is to blame. eBay should just bail out here as you don’t see unlicensed LV new/used etal. being sold on Amazon do you?

sandiOn 06.30.2008 at 4:10 pm Said:

I fail to see why any manufacturer who’s received the full asking price for their product should then expect to control the resale in the future. It’s absurd!

A buyer wants does not trump a manufacturer’s rights.

I think you are missing the bigger picture. The law has been there, probably not enforced until the last few years. I doubt seriously Vuitton doesn’t want resale of their product - afterall the resell creates a new market segment, the person who can’t yet afford brand new, but will become brand loyal and someday be able to afford new.

But you have an ebay that has thousands of listings using your product name/brand. You repeatedly aske ebay to stop the counterfeits. No success, you have staff monitor the site ebay is less than speedy. Many auctions of fakes last one day, so now you have to have staff who monitor 7 days. What about time zones, now you have staff 24/7/365.

You can’t even really hire high school interns because some of the sellers are so good they know what makes it look real, you now have to have your bst experts monitoring ebay.

ebay is costing companies money. ebay caused manufacturers to go to court to enforce a law they would not have wanted enforced previously.

The cpounterfeits have grown to the point they now outnumber the real items. I am not sure ebay will be able to fix it because they ignored it for so long.

But if a manufacturer wants to enforce this law, I as a buyer have free will. I can not buy a product I can not resell afterall. No court has really taken away my right. I personally would never buy a name product on ebay, their reputation is not great.

Which brings the second reason why a Vuitton would not want their name in the same sentence as ebay.

I think the bigger question is, would any of these companies gone to court had ebay done what it was suppose to do to begin with?

Matthew WintersOn 06.30.2008 at 4:47 pm Said:

Richard, it does seem like you tend to be as forthright as possible, but even you probably don’t have freedom to be completely upfront. The reality concerning this decision in France and eBay’s statement is that both LVMH and eBay have good points. And their points are not mutually exclusive.

It is very possible that LVMH is overreaching. It is very possible this is more about business than intellectual property. It is also possible that it is not. I have know way of knowing.

If the former is true, then eBay’s position is justified.

But I think the real point being missed is that none of this is really the point. If eBay had done due diligence to combat trademark fraud in the beginning instead of scrambling late in the game, LVMH wouldn’t even be able to use counterfeit products as an argument. So while both parties make good points that makes for an intellectually stimulating debate, eBay really brought this decision upon themselves. I think eBay take the issue seriously enough now, but this is a case of “too little, too late”.