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EBay Shirks Responsibility For Fakes, Faces Pivotal Lawsuit

  • NY Times, Monday, January 30, 2006 1:26 PM

The result of a new lawsuit between the online auction giant eBay and high-end jewelry maker Tiffany and Company could have huge implications for the ecommerce industry, says The New York Times. Tiffany is accusing eBay of facilitating the trade of counterfeit items on its Web site. EBay says it takes no responsibility for fakes being sold on its site because the company merely facilitates the trade of goods between buyer and seller without directly selling anything itself. In an internal study, Tiffany bought 200 jewelry pieces labeled as Tiffany items on eBay, and found three out of four of them to be fakes. The jewelry maker argues that the auctioneer should be accountable for the fake items listed on its site, which it says tarnishes and violates its trademark. Should Tiffany win, it would open an enormous can of worms for eBay and similar businesses, which have virtually no means of policing their online marketplaces. All they have is a user feedback system, which is merely a deterrent to mass fraud by one user. For its part, says eBay it doesn't investigate counterfeit claims made by customers, only rights owners. Well, now they've got a big complaint by a rights owner--and a potentially pivotal case before them, because if eBay loses this one, several more will be coming its way in quick succession.  

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