[kictanet] eBay hit with £30m fine for sales of fake luxuries

Sun Jul 6 11:05:45 EAT 2008

"...However, once I buy the product, and *pay them dearly for it* does the product *belong* to me? I say yes!..."
"...So, since I own it. Can I do whatever I want with it? Pour it down the toilet, give it to my watchman, give it as a prize for best 'whatever' in my son's school, or even sell it if I want to recapture some of the price premium I paid for the brand..."

(Note: I'm not a lawyer nor do I know exactly what the law says about this)

If by *belong* you mean it's mine and I can mess and tear it up the way I want then some products might not *belong* to you. E.g. I read/heard somewhere that you can't open up the XBox. It has something to do with Microsoft protecting technology. Another popular example is software. License agreements come with restrictions.

Basically a product is composed of a number of things: The branding and logos which are trademarked, the intellectual property and technology which are patented, and all these don't *belong* to you even if you paid for the product (Also note that the price you paid includes the cost of researching the patented technology and branding and logo costs but still they will not belong to you). What belongs to the consumer is being able to consume the product how it's the manufacturer advises you to consume it otherwise your warranty is void.

Because of the variety of products that exist in the world today this *belong* issue is a debate and that's one of the reasons open source exists.

As the E-bay spokesperson said it's more about manufacturers trying to keep a certain image. Counterfeits existed before ebay. Ebay has an image of being a place to find goods at an affordable price (depending on quality) but luxury brands are not associated with this sort of image.

8~)

--- On Sun, 7/6/08, Brian Munyao Longwe <blongwe at gmail.com> wrote:
From: Brian Munyao Longwe <blongwe at gmail.com>
Subject: Re: [kictanet] eBay hit with £30m fine for sales of fake luxuries
To: kiriinya2000 at yahoo.com
Cc: "KICTAnet ICT Policy Discussions" <kictanet at lists.kictanet.or.ke>
Date: Sunday, July 6, 2008, 4:48 AM

Oh my, oh my, oh my,

I have serious issues with this action.

I think it goes directly against the individual right of the consumer.  
PLs allow me to elaborate.

First, let's set the issue of counterfeit aside and consider the  
context that has been set.

Louis Vutton, Christian Dior, Hermes etc consider themselves exclusive  
brands that cater to the upper echelons of society. Fine, any vendor)  
of any product can pick his/her target market/niche and position/brand  
appropriately.

However, once I buy the product, and *pay them dearly for it* does the  
product *belong* to me? I say yes! Even a court of law will uphold my  
ownership right if I have 'proof of purchase'.

So, since I own it. Can I do whatever I want with it? Pour it down the  
toilet, give it to my watchman, give it as a prize for best 'whatever' 

in my son's school, or even sell it if I want to recapture some of the  
price premium I paid for the brand.

What these aristo-brats are saying is that I cannot advertise it on  
Digger classifieds in the Standard, the Sarit center billboard, ebay,  
yahoo shops,or my personal website because none of them is part of the  
dealer network.

This is totally wrong!

Now back to counterfeit. Yes, there is a problem, but how do you  
accuse a trading platform of complicity in a case where the market is  
Internet Based and allows anyone, anywhere in the world to advertise  
and sell anything for any price?

There should be other measures taken to dig out counterfeits and  
protect the firms' investments in creation of their brands. There are  
laws, and procedures for this.

What these guys have done to ebay is classic case of shooting the  
messenger.

Am I the only one aggravated by this?

Brian

Ps France should have a 'FICTANET' to make noise about this.

Sent from my iPhone

On 05 Jul 2008, at 9:17 PM, alice <alice at apc.org> wrote:

> Hi all,
>
> interesting ruling by French courts on 30th June....of E-commerce and
> brand protection, advertisement consumer protection and so many other
> issues.
>
> best
> alice
>
>
> http://www.guardian.co.uk/business/2008/jul/01/ebay.hitechcrime
>
> eBay hit with £30m fine for sales of fake luxuries
>
>
> The world's biggest online auctioneer, eBay, was ordered by a French
> court yesterday to pay €38.6m euros in damages to the luxury goods g 
> roup
> LVMH for negligence in allowing the sale of fake bags, lipsticks and
> designer clothes.
>
> The fine of more than £30m is the biggest eBay has faced in Europe a 
> nd
> is the latest episode in a series of long-running legal battles it has
> fought with fashion and cosmetic giants.
>
> The site immediately appealed against the ruling and said luxury goods
> giants were using the issue of fakes as a "stalking horse" to
attack
> online commerce and keep a stranglehold of sales outlets to the
> detriment of consumers.
>
> The confrontation has implications for the access of online shoppers  
> to
> luxury brands through auction sites and also for eBay's business model
> as it faces the issue of how to police its platform of global sites,
> which at any one time have about 100m items for sale across the world.
>
> The issue has particular resonance in France - the base for some of  
> the
> world's biggest luxury goods companies, who have placed themselves at
> the forefront of fighting counterfeit.
>
> The French company LVMH, the world's leading luxury brand, went to the
> Paris commercial courts demanding €50m in damages over two issues: f 
> irst
> it argued that eBay had committed "serious errors" by not doing
enough
> to prevent the sales of fake goods in 2006, including Louis Vuitton  
> bags
> and Christian Dior products; it also argued that eBay had allowed
> unauthorised sales of perfume brands owned by the group: Christian  
> Dior,
> Kenzo, Givenchy and Guerlain.
>
> It said that even if the perfumes were real and not fake, their sale  
> on
> the site violated Christian Dior's distribution network which only
> allowed sales through specialist dealers. The court ordered eBay to  
> stop
> selling the perfumes or running ads for the brands, or face a fine of
> €50,000 a day.
>
> The ruling ordered eBay to pay €19.28m to Louis Vuitton Malletier a 
> nd
> €17.3m to its sister company Christian Dior Couture for damage to th 
> eir
> brand images and causing moral harm. It must also pay €3.25m to the  
> four
> perfume brands for sales in violation of its authorised network.
>
> Pierre Gode, an aide to Bernard Arnault, the LVMH president and  
> France's
> richest man, told AFP: "It is a major first, because of the
principles
> that it recognises and the amount sought." He said the decision was
> crucial for the creative industry and "protected brands by
considering
> them an important part of French heritage".
>
> The ruling comes a month after another French court ordered eBay to  
> pay
> the fashion house Hermes €20,000 for allowing the sale of counterfe 
> it
> handbags.
>
> The site said it had stepped up its measures to prevent counterfeiting
> since 2006 and now spends $20m (£10m) a year keeping the site "clean

> ",
> using programmes to analyse suspicious sales and working with the  
> owners
> of brand rights. Last year, 2m items suspected of being counterfeit  
> were
> removed from the site and 50,000 sales stopped. Vanessa Canzini, an  
> eBay
> spokeswoman in Europe said: "The big issue here doesn't seem to
be  
> to do
> with counterfeiting - if it was, they would have gone after the
> counterfeiters. It's about saying we are a luxury brand, we don't
want
> others selling our goods, even if they are real. That's why we will
> appeal this decision."
>
> In a statement, eBay said big luxury goods labels had a hidden agenda
> and were using fakes as a "stalking horse". "It is clear
that eBay has
> become a focal point for certain brand owners' desire to exact ever
> greater control over e-commerce. We view these decisions as a step
> backwards for the consumers and businesses whom we empower every
day."
>
> The group, which saw around $60bn worth of goods sold across its
> platforms last year, says that as a host for independent vendors, it  
> has
> a limited responsibility and capacity to regulate what is sold. But
> luxury goods groups have accused eBay, which earns a commission on
> sales, of facilitating forgeries and fakes by providing a marketplace
> for vendors who knowingly sell counterfeit items.
>
> The site is also facing other lawsuits worldwide: the New York  
> jeweller
> Tiffany & Co has sued the site for turning a blind eye to sales of
> counterfeits, describing it as a "rat's nest" of fake goods.
It also
> faces action from L'Oreal in the UK and five other European countries.
>
>
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