Group 2 -- Team Coke Bottle -- Reid, Trever, Mellissa

Issue
Unlike shopping at the local mall, buying products on eBay means making a purchase without actually seeing the product. It is estimated that fashion business’, lose over $600 Billion every year due to the black market of counter-fit items. EBay has a relatively decent history record when it comes to selling items which are up to the standards of the clients, but still contributes to the annual $600 Billion in loses. This contribution to criminal activity is a negative by-product of eBay and why there is negativity to the online auction site.

History
The online auction company was founded, September 3, 1995 by Pierre Omidyar in San Jose, California. The purpose of the website is to allow for individuals, and businesses buy and sell goods from the comfort of the home or office. With the Internet being such a good source for networking, users have the ability to interact with people from all over the world in a very easy manor. Originally eBay was only available in the USA, but due to the convenience and popularity of the website, it is now offered in 30 different countries. Due to such great following and financial revenues, eBay has been able to acquire other companies such as Skype, Kijiji, and PayPal; the last has become eBay’s payment method of choice. Products sold on the website vary from regular items such as clothing, electronics and sports memorabilia to bizarre items, such as an Easter Bunny shaped chicken finger.

Precautions
EBay takes precautions to prevent poor service and knock-of items sold by its sellers. There are seller ratings, which are based on surveys from prior clients. Items still run the risk of being fakes and not exactly what the buyer wanted. It is often questioned how products can be sold at such a low price. Another way to protect yourself from counterfeit items is to follow lists like the one below that gives tips on how to conduct a proper purchase via the Internet.

7 Tips for Avoiding Counterfeit Items Online

 * 1) Don't ever buy an item that you learn about via bulk email ("spam"). Your chances of receiving the item *at all* are only 45%, and the chance of your getting what you think at a reasonable price (so you're happy with the transaction) is less than 5%. In other words, as Jim likes to say, "If it's spam, it's scam."
 * 2) Always use a credit card to purchase online. This protects you. Your maximum exposure is $50, and often you won't even lose that amount if you get scammed.
 * 3) If you are buying something at a reputable online auction site, always check out the references for the seller and only buy from sellers who have good references. And take advantage of online auction guarantees, such as those offered by amazon.com.
 * 4) Don't conduct business with an anonymous user. Get the person's real name, business name (if applicable), address, and phone number. Verify this information before buying. And don't send your payment to a post office box.
 * 5) Be more cautious if the seller uses a free email service, such as hotmail, yahoo, etc. Of course, most people who use these free services are honest. However, most problems occur when a free service is used. After all, with a free email service, it is very easy for the seller to keep his or her real identity and information hidden.
 * 6) Save copies of all of the emails and other documents involved in the transaction. Then, if you discover that an item is counterfeit, you have documentation to help you deal with the problem.
 * 7) Use common sense and trust your intuition. If you have a funny feeling about an item, don't buy it. You're very likely right that it is counterfeit.

Companies Affected
All companies are susceptible to having their products reproduced, and then sold as real items on the Internet.

Examples of Some Companies Affected

 * Louis Vuitton
 * Hugo Boss
 * Nike
 * Oakley
 * Polo Ralph Lauren
 * Timex
 * Rolex
 * Tiffany’s
 * Gucci
 * Dior

Positives Of eBay

 * Access from the comfort of your home
 * Easy to get access to many goods which are hard to find
 * Low cost of good due to auctions
 * A good source for creating contacts
 * Large number of people who look/buy products daily
 * The ability to rate sellers for other people to see

Negatives Of eBay

 * Not actually seeing the items you purchase
 * Receiving the item takes time
 * Chance to buy counterfeit products
 * Can be hard to sort out issues when order-delivery is not correct

Case Study
In 2006, one of the companies which is most affected by the sales of counterfeit goods on eBay, sued the online auction company for $60 Million. Louis Vuitton (LVHM) claimed that eBay made profits on counterfeit items, which were thought to be real. LVHM did research on the items that were sold on eBay and found that approximately 90% of the items sold were fakes. LVMH says in its lawsuit that of 300,000 Dior-branded items and 150,000 Vuitton bags have been counterfeited. In 2008, eBay was ordered to pay $64 Million to LMVH, and the courts also forced eBay to pay another $20 to LMVH for sales of fake perfumes. The lawsuit above was not the first time that eBay has been sued for fake items sold. Tiffany’s Jewelry, company had complaints of trade-marking infringements by eBay. Although the company did not win its case like LMVH, this is just another case of a company, which was hurt enough by sales of fake items, that it tried to put a stop to the sales of its goods.

Conclusion
Websites, such as eBay are a great source for doing shopping from the home. With approximately 66% of Americans having used the Internet at some point for shopping, the profit to be made by online shopping is no doubt huge. Buying products from the companies website ensures the client that they are getting what they are expecting. Companies like eBay provided discounted goods and that is very appealing to the average consumer. The problem with online auctions is that you are never sure of what you are purchasing. In the case of LVHM, the claim that 90% of their products sold on eBay are fakes, is a huge number and should be very alarming to the consumer. With such large amounts of money being spent by the consumer, and such a large amount of money being lost by the corporations, it leads to moral issues when it comes to counterfeited goods. Even with discounted goods being offered, there is not a real positive to eBay when it comes to purchasing fashion items. We never really know what we are getting when purchased on eBay!