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EcommerceBytes-NewsFlash, Number 1823 - June 30, 2008 - ISSN 1539-5065    0 of 5

That Ain't No Baguette! eBay Loses $61 Mil in French Bread

By Ina Steiner
EcommerceBytes.com
June 30, 2008




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eBay finds itself embattled on several fronts today. A French court ordered eBay to pay almost 40 million euros to LVMH for "negligence" and "illicit sales" over the sale of counterfeit goods on its online auction site. And in Australia, sellers loudly complained to government regulators in a conference convened to discuss eBay's bid to go PayPal-only.

eBay, which has long told courts it is a "venue only" in order to limit its liability, brings buyers and independent sellers together. But as the public and world courts have grown less patient with problems of online auction fraud, eBay has increasingly restricted sellers through various Trust & Safety policies.

eBay launched an anti-counterfeiting initiative in late 2006 as designer brands began suing the company over the problem of fakes. eBay further restricted sellers from listing brand name items, including additional restrictions on cross-border trade.

Over the past 2 years, eBay has been moving toward a more restricted system to control counterfeits and fraud. eBay has increased efforts to get sellers to use its own online payment service PayPal through various requirements, such as its "Safe Payments" policy; it also limits buyer protection to PayPal-processed transactions.

In the UK, all sellers are required to accept PayPal, and in April, eBay Australia announced it was going to a PayPal-only marketplace, though the Australian Competition & Consumer Commission (ACCC) has said it may prevent eBay from doing so.

eBay may be envying its rival Amazon.com, which has a stellar reputation among consumers and processes all payments, including those from third-party merchants.

The Sydney Morning Herald newspaper published a report on Monday's ACCC meeting in Australia, and details of the French court ruling can be found on the wires, such as this Bloomberg report that says eBay will appeal the decision.

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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