EcommerceBytes-NewsFlash, Number 1421 - November 29, 2006     1 of 4

eBay Rolls out Major Initiative to Fight Counterfeits

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eBay has rolled out a major new initiative to fight the problem of counterfeit goods and will begin scrutinizing all sellers who list items that are particularly susceptible to counterfeiting. eBay already prohibits the sale of counterfeits on its site and has a VeRO program for rights-holders to report violations. But companies such as Louis Vuitton and Christian Dior Couture have filed lawsuits against eBay claiming it is not doing enough to fight the problem (http://www.auctionbytes.com/cab/abn/y06/m09/i22/s03).

The new initiative was announced to some sellers by phone on Tuesday, and eBay said sellers need to adapt to four "safeguards" that make up the new program. The initiative only applies to items particularly susceptible to counterfeiting. eBay will not provide sellers with a list of those items, however, stating those items often change, and that providing such a list publicly would help counterfeiters.

The four safeguards of the program are as follows:

1) Sellers who list items that appear on eBay's list of items particularly susceptible to counterfeiting (which we'll herein call eBay's anti-counterfeiting list) must become PayPal verified. However, those sellers are not required to offer PayPal as a payment option in their listings.

2) eBay will conduct manual "seller reviews" for sellers who list items on its anti-counterfeiting list. eBay will not authenticate items, but will use various information to determine if sellers will be permitted to sell such items. eBay would not get specific about exactly what criteria they would consider during the review process, but said it would consider "a variety of factors."

3) eBay will ban 1-day and 3-day auctions of all items on its anti-counterfeiting list to give eBay members and rights-holders enough time to review items.

4) eBay will restrict cross-border trade on items on its anti-counterfeiting list. Sellers in the U.S., Germany and UK may ship such items worldwide except to Hong Kong and China. Sellers in English-speaking countries can trade such items freely with each other. But sellers in China and Hong Kong may not list these items on their local sites or on any other eBay site.

ChannelAdvisor President and CEO Scot Wingo, who broke the news on his eBay Strategies blog on Tuesday, said he loves the new initiative but is concerned with any changes made during the busy fourth quarter, even positive ones. "My take is they've dipped toe in water with other efforts, seen positive results, and now are going deeper."

eBay Senior Director of Seller Development Todd Lutwak said the move was "not a holiday initiative." When asked if it was in reaction to litigation, eBay spokesperson Catherine England said the move was designed to ensure a good buying and selling experience on eBay that would bring long term value to the marketplace.

Lutwak explained that after a seller lists more than a certain number of items on the list, the system would set off an automatic trigger requiring a manual review of the seller. "If you've sold these items in the past, your account may have already been reviewed," but if sellers alter what they are selling, they may be subject to another review. He said eBay is looking to make the review process a quick one. When asked what turnaround time he was striving for, he would only say a "very reasonable" one.

eBay does not inform sellers whether or not their accounts have been reviewed. A combination of staff on the Seller Development and Trust and Safety teams on eBay will be conducting the reviews. Lutwak and England would not say how many staff are devoted to conducting the reviews, but England said Trust and Safety has more than 2,000 employees globally in a variety of roles.

Lutwak encouraged sellers to be proactive. Just as they would notify a credit card company ahead of time if there would be significant changes in account activity, he recommended eBay sellers be proactive and communicate selling changes to eBay so they don't hit triggers, including triggers designed to spot account takeovers. These are "best practices" that eBay encourages sellers to follow, he said.

Sellers of items that are particularly susceptible to counterfeiting will want to become PayPal verified, and also change the ship to location on listings to uncheck China and Hong Kong, Lutwak said.

England said this week's anti-counterfeiting initiative is one of a couple of initiatives coming in the next couple of months to provide a safe and trusted marketplace for buyers and sellers.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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