Interesting WSJ article about lawsuit against ebay

  1. I was catching up on my Wall St Journal reading and saw an article published last week about a civil suit Tiffany filed against eBay in 2004. Apparently the trial began last week.

    Tiffany's attorney said that Tiffany had a buying program under which it purchased items off eBay to determine if they were fake. He said 75% of the items purchased under the buying program Tiffany instituted in 2004 were fake.

    According to the article, eBay's lawyer said that "hundreds of thousands of sellers have been suspended after reports of counterfeit sales" and "a number have been banned permanently.

    It will be interesting to see if ebay is found liable for "contributory infringement." The trial should end this week.
  2. I have been following this lawsuit ever since it was filed and will also be very interested in seeing the outcome. I doubt very seriously that eBay will be found liable, though..."only a venue" and all that. It's a legitimate defense, and the primary piece of evidence to support that is the user agreement and the seller agreement which every single eBay user must necessarily agree to.

    Hermes has filed a similar lawsuit against eBay, but in France. Not sure why they chose to do it there instead of doing it out of NY where their US headquarters is located (since the lion's share of the H fraud comes from the US, Asia, and several other countries other than France), but it should be interesting. I know practically nothing about the French legal system, so I have no predictions there.
  3. They did it in France because that is where H is headquartered.
    JMO but I think the only a venue is a bunch of crap. Ebay has their fingers in every part of the transaction. They even rule on refunds. Only a venue is the newspaper which puts your ad in & that's it. They don't handle the money, etc.
  4. Technically eBay and PayPal are separate companies, so no, they do not rule on refunds. Not to mention the fact that obviously a buyer and a seller can use nearly any payment method they wish--PayPal is just the *preferred* method. Nothing at eBay says you MUST use PayPal.
  5. Ebay gets a cut of each transaction so they are making profits from it. I'd love to see Ebay shut down if I'm really honest, I think it's gotten way out of hand.
  6. LOL, shut down by whom? They're not breaking any laws, or at least they have definitely not been "convicted" of breaking any laws. And, certainly you would get an argument from the millions of professional eBay sellers, software vendors who provide third party solutions, publishers, authors, stockholders, and others who make a living from its existence.

    Believe me, I am the first to find fault with eBay when necessary, but there's no basis, legal or "moral", for "shutting them down" and frankly there's no one with the authority to do so either. They are a COMPANY, doing a legal business. They just really need to police their site a lot better--and actually to tell the truth I am starting to see some signs that they are doing this. If you look in the Hermes subforum, I just started a thread to that exact effect.
  7. I am with Cynthia. Ebay is only defending civil suits -- it's just possibly going to cost them money. And there is no criminal law that could "shut down" ebay. I can't even imagine a criminal fine big enough to shut ebay down.

    Even though Hermes is based in France, it certainly can legally sue ebay in the US. I am guessing that Hermes thinks it will get a more sympathetic judge and/or jury in France.
  8. Ebay provides a place for a lot of people to illegally earn tax free income, in some cases these people are also claiming welfare or may be illegal immigrants. It's also used to launder money by drug dealers and as a place to sell fakes made by child slaves.
    I know they will never be shut down, I still think it should be though.
  9. I think ebay is just a reflection of the moral distribution of society as a whole, not necessarily a cause of it. Counterfeiting will continue until the end of time, unless buyers stop wanting fake products. That will never happen because people want the status of a designer product, and they don't want to pay for it. It's the natural laws of supply and demand.

    There is a whole lot of legitimate business going on through ebay, and I personally think they've done a much better job of controlling their selling environment than other auction websites. We're at the beginning of the internet business revolution, and there will be kinks to iron out for years to come. I don't think ebay should be "shut down" when it offers so many positive things, just because some dishonest people slip through the cracks.
  10. I honestly believe that the majority of Ebay business is illegal in some way or another. Even if it's just the stay at home mom who makes a little on the side to help pay the bills, if that money isn't declared to the IRS (at least over a certain amount anyway I think) then it's illegal.
    I don't think Ebay is to blame for the counterfeiting of items in general, but you can't deny that they have made it significantly easier for people to both buy and sell them.
  11. What is ironic to me about the whole tax thing is that people scream and yell about Moms making illegally untaxed income (and I agree, it's actually a real problem), yet when buyers are asked by a legitimate incorporated business like mine to PAY sales tax because they live in the same state where I do business, the throw a bloody fit. Can't have it both ways!

    I would love to see some evidence that eBay is used to launder money made by drug dealers, though. That's a new one on me, though nothing would surprise me these days.
  12. I think that because us tPF members are always trying to buy and sell high priced designer items, we come accross more of the questionable auctions. But if you search for, well, just about anything else, you'll see how many auctions are not selling fake goods, and that most sellers are either using ebay as a garage sale to get rid of their crap, or they're small businesses or resellers. For instance, I just did a search for Donna Karan pantyhose this morning, and I would bet that no one is trying to sell fake pantyhose for $4.99. I once bought a case of aluminum foil on ebay, and another time I bought a custom made paper towel rack from a woodworker. You can seriously buy just about anything on ebay, and I'm gonna go out on a limb and say that 95% of it is legitimate. Not that the illegal stuff doesn't happen, of course it does. I just think we focus more on the bad stuff. Just my 2 cents:smile:
  13. Oh, and about the sales/income tax thing, I don't know the tax laws very well, but there's a lot of confusion about what you're supposed to report. Maybe someone else knows the answer to this. I've always thought that if you're an individual selling something used, or even something new for less than you paid for it, you don't have to report that as income, because it's not income. Let's say you bought a bag for $1000, decided you didn't love it, and sold it on ebay for $800. You already paid sales tax on the bag when you bought it, and now you're actually losing $200 when you sell it. So, the $800 cannot be considered income, because you already paid taxes on it and didn't make a profit. If you make a profit, that might be a different story.

    As for paying sales tax, that's not the out of state seller's responsibility to collect it. Like if you order a bag from a store that's shipped from out of state, they typically will not charge you sales tax. As the buyer, you're supposed to report and pay those taxes yourself in your home state. And of course very few people do. That's my understanding. If that's correct, then ebay actually does very little to facilitate tax fraud. I can think of maybe 2 occasions the entire time I've been selling on ebay where someone from my own state bought something I was selling, so I've only committed tax fraud twice:smile: Anyone know anything more about taxes?
  14. We used to use a Walgreens type store's site in the UK to send birthday and Christmas gifts to our relatives. On at least 3 occasions the gifts didn't arrive, and when we enquired about it with the store we were told the truck had been hijacked/robbed each time(a fairly common occurrence in the UK!). A quick check on Ebay would probably reveal a few hundred listings of that particular item. Which makes me wonder how many of those were legitimate unwanted gifts.
    In the case of the stay at home moms, they are not all selling used items to recoup some of what they paid, a lot of them are going to distribution centers and outlets and picking up bargains to sell on for a profit.
    Even for the designer bags, most of the bags I've seen for sale were either going for a tiny fraction under the previous season's retail (and were therefore likely bought on sale) or actually over retail because they were rare or sold out etc. The genuine 'I don't want it anymore' auctions seem to be few and far between.
    Clearly we differ here on our opinions about the level of illegal activity Ebay facilitates. Maybe I am more skeptical but it's probably because I am from a town where this kind of thing goes on all the time (my home town not Chicago)! But having taken a lot of training on money laundering because I work in financial services, I'm aware of how easy it is to do and how difficult it is to prove. Sometimes I think nothing will amaze me anymore.