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eBay Verdict is Egregious Injustice to the Consumer

NEW YORK, July 15 PRNewswire — According to the Luxury Institute today's ruling in favor of eBay by the U.S. District Court in Manhattan fails to protect consumers' rights and addresses the critical issue that luxury brands and internet retailers, by and large, must take responsibility for the authenticity of goods sold to consumers. The lawsuit, which was filed by Tiffany & Co. eight months ago, alleged that eBay allows the trading of counterfeit Tiffany merchandise on its site. Counterfeit or fraudulent goods are rampant in the marketplace, and internet retailers must accept the responsibility to protect the consumer by guaranteeing the authenticity of the luxury goods they sell.

eBay's victory leaves the onus on consumers to determine the authenticity of the branded luxury product they purchase and to seek redress if it is found to be counterfeit. Today's verdict supports the rule of the internet auction and reseller marketplace that has been "caveat emptor" — let the consumer beware. As a result, global sales of counterfeit branded luxury goods have burgeoned to more than $15 billion, or more than 10% of the total branded luxury goods sales worldwide. The court's decision not to rule in favor of the consumer only feeds the tsunamic tide of counterfeit branded luxury goods through the internet.

"Today's verdict reaffirms the necessity for those few internet retailers, resellers and auction marketplaces that currently assume responsibility for the authenticity of the branded luxury goods they sell," says Milton Pedraza, Chief Executive Officer of the Luxury Institute. "Luxury auction sites like Portero.com are leading a new era of commercial and social responsibility that will be defined by removing the burden of proof from the consumer and taking responsibility for assuring and protecting the consumer from counterfeit branded luxury goods. Seller authentication is important because there is little if any recourse for those consumers who are unaware that they have purchased counterfeit branded luxury goods through the internet."

Portero.com, one of the only online auction marketplaces that authenticates branded luxury products and offers consumers clear and unequivocal redress in the event the product purchased is counterfeit, began on eBay, and, in 2007, severed ties to build its own independent marketplace when the number of luxury counterfeit goods and fraudulent sellers began to spiral out of control on eBay.

"eBay is a fabulous and efficient marketplace for many categories," says Portero Founder and CEO Michael Sheldon, "but the luxury industry is different because the appeal of these brands is rooted in their exclusivity and image. The luxury marketplace is a perfect target for counterfeiters. All they need is a good distribution outlet, which eBay provides, and lower prices, which they can offer with inferior quality, higher volumes and lower production costs."

For the consumer of authentic luxury goods, easily available counterfeit products impact the value of their item and the ownership experience — two fundamental reasons to buy a luxury item in the first place.

About the Luxury Institute:

The Luxury Institute is the uniquely independent and impartial ratings, reviews and research institution that is the trusted and respected voice of the high net-worth consumer. The Institute provides a portfolio of proprietary publications and research that guides and educates high net-worth individuals and the companies that cater to them on leading edge trends, high net-worth consumer rankings and ratings of luxury brands, and best practices. The Luxury Institute also operates the Luxury Board (http://www.LuxuryBoard.com), the world's first global, membership-based online community for luxury goods and services executives, professionals and entrepreneurs. To reach the Luxury Institute, please call 646-792-2669 or go to http://www.LuxuryInstitute.com.

SOURCE Luxury Institute

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