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

The Issue
Counterfeit fashion merchandise being sold online, creating problems for both the buyers of these items and the companies being falsely represented.

Argument
Unlike shopping at the local mall, buying products from online auction companies, such as eBay, means making a purchase without actually seeing the product. Far too often, people are ordering what they believe are authentic pieces at discounted prices, but turn out to be cheap knock-offs. It is estimated that fashion business’, lose over $600 Billion every year due to the black market of counterfeit 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. This negativity to the online auction site has lead to increased awareness for online shoppers.



History of the Company
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.

6 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, "If it's spam, it's scam."
 * 2) 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.
 * 3) 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.
 * 4) 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.
 * 5) 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.
 * 6) 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.

Questions to Ask Yourself Before Making an Online Purchase

 * Does it seem to good to be true? 
 * If it does, then it probably is. The number one indicator of fake or counterfeit items is the price.  Stay away from goods that are selling at a significantly lower price than seems appropriate, or at a significantly lower cost than other similar items on eBay.


 * Is it a real product in your market?
 * Mass-market products for sale on eBay that you've never seen in local stores are likely not intended for your nation or region of the world, if they are available at all. For instance, a half-price video camera that you later find works only with European PAL-standard television sets, while you are in the US NTSC-standard market.


 * Are other materials included that confirm authenticity?
 * Though these items, too, can be counterfeited and/or faked, it never hurts to look for auctions that include a certificate of authenticity, a hologram-printed license certificate, a manufacturer's warranty card, or other authenticating materials.


 * Should the seller have access to this material?
 * Use your common sense about points like this one. A seller that lists shipping times from China while selling goods by a prominent American designer is not likely to be selling the real thing. If you can't see how a seller could have legitimately sourced the products in his or her auctions, there's a good chance that their source isn't legitimate at all.


 * Does the seller's feedback indicate authenticity problems?
 * Always check the feedback of any seller you're considering buying from to see if any previous buyers have been unsatisfied about the legitimacy of the goods offered.


 * Is the seller cagey about the product and its origins?
 * Looks for words such as, "genuine," "authentic," "original equipment," licensed," "legal," and "real," as apposed to phrases like, "genuine compatible," "authentic reproduction," or "legal in many areas." Sellers of real goods will use those keywords to indicate authenticity and encourage buyers to buy.

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
 * Dolce & Gabbana
 * Dior



Positives of eBay

 * Convenience
 * Access from the comfort of your home
 * All kinds of items all in one place
 * Search feature allows you to find items in a short amount of time
 * Variety
 * Easy to get access to many goods which are hard to find
 * Price
 * Low cost of good due to auctions
 * Other
 * 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

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

Common Fakes and Why You Might Want To Avoid Them
Though you'll find counterfeit items (or "gray area" items) in many eBay categories, there are a few categories in which fake items are extremely common, despite eBay's attempts to crack down on unscrupulous sellers.


 * Computer software. One of the worst offenders on the eBay site, the computer software category is unfortunately littered with counterfeit and pirated goods.


 * Music, movies, and entertainment media. Electronic entertainment media of all kinds is commonly sold illegally on eBay, whether in the form of pirated/unlicensed copies, or in the form of import- or export-restricted goods.


 * Designer goods. Designer goods in many shapes and sizes, including clothing, accessories, household goods, and even commercial art, is often sold either in counterfeit or pirated form on eBay.


 * Collectibles and antiques. Many collectibles and antiques on eBay are sold in so-called "grey auction" format, in which the seller isn't quite clear about whether the item is authentic or not.


 * Consumer electronics. Finally, a certain proportion of the consumer electronics items on eBay are either import- or export-restricted or sold in markets other than those for which they were intended by the manufacturer.

Given the items on this list, an argument can be made that counterfeits, fakes, and region-restricted items are at times good buys for consumers. After all, thanks to eBay, consumers in a given part of the world might be able to buy a product or good to which they might otherwise never have had access, or at a price that they might never otherwise have been able to afford

Why might you as a buyer want to be careful about buying these types of goods? There are very sound and pragmatic reasons to exercise caution.


 * Law enforcement and civil liability. In the case of items like pirated computer software, international enforcement activity is very high. Though it is unlikely that you'll find yourself in legal trouble just for making a single software purchase, it isn't impossible&#151;and multiple purchases compound your risk of incurring severe penalties or liabilities.


 * Functionality and support. As was the case with the counterfeit Indiana Jones DVDs, the quality of counterfeit products is often lower that the quality of genuine goods. Even when the quality is equal, manufacturers generally refuse to support counterfeit or grey market items in any way. You won't be able to get updates, warranty service, or even dial the product's help line if you have an issue.


 * Investment value. By purchasing a counterfeit or grey-market good, you are investing your hard-earned dollars in an item that is intrinsically less valuable than the real thing, and that is correspondingly unlikely to retain value (or increase in value) at the same rate as the genuine article. In short, fake goods make bad investments.

eBay's Stance on Counterfeit
eBay's official stance on counterfeit items is clear and concise. Counterfeits, unauthorized replicas, unauthorized items (such as counterfeit watches, handbags, or other accessories) or unauthorized copies (such as copies of software programs, video games, music albums, movies, television programs, or photographs) are not permitted on eBay. Unauthorized copies include (but are not limited to) copies that are pirated, duplicated, backed-up or bootlegged. It is illegal to sell unauthorized copies of media.

Guideline : If the product you are selling bears the name or logo of a company, but it wasn't made or endorsed by that company, don't list it on eBay.

Violations of this policy may result in a range of actions, including:


 * Listing cancellation


 * Limits on account privileges


 * Account suspension


 * Forfeit of eBay fees on cancelled listings


 * Loss of PowerSeller status

While it seems eBay is taking appropriate action, it is widely accepted the much more must be done to discourage the profliferation of fake goods. Missing from the list of consequence is any sort of criminal charges. eBay must push for jurisdiction and legislative support to impose fines and jail times on serious offenders.

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. For its lawsuit against the online auction giant, Tiffany had randomly purchased a few hundred "Tiffany" items on eBay and discovered that three quarters of these items were counterfeit. 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. Vast amounts of money flows every second on eBay, and with money comes inevitable problems and moral issues. It is eBay's responsibility to filter what is and is not on its website. eBay needs to show more leadership in identifying and prosecuting offenders of their offical code of conduct. With that being said, the consumer bears some responsibility too. You can never be sure what you are REALLY getting when buying items on eBay!

Group

 * CPSC 203 Fall 2008, Section L04, Banerjee
 * Tutorial 22, Maryam Majedi
 * Reid Jorgensen
 * Trevor Koverko
 * Melissa Donegan