Who Will Cleanup eBay's Cesspool Of Counterfeits?

The website is ideal for fraudulent and counterfeit sales.

January 11, 2018 - Los Angeles, CA – eBay is under fire for some shady practices - enabling and facilitating the sale of an inexhaustible supply of counterfeit goods, while hiding behind illusory counterfeit policies¹ and ineffective website policing. Forbes recently deemed the e-commerce giant a "cesspool of counterfeits and other illegal and potentially dangerous goods."²

eBay is a haven for U.S. and cross-border scam artists to freely unload counterfeit merchandise, mostly from China, on unsuspecting consumers. Consumers just don't have a chance of identifying dangerous, deadly and often visually indistinguishable counterfeit goods. The Counterfeit Report®, a popular consumer advocate and industry watchdog, has removed over 1.9 million counterfeits, and purchased over 2,300 counterfeits from eBay (NASDAQ: EBAY). Consumers can see the authentic items and their counterfeit counterparts on TheCounterfeitReport.com website.

eBay has migrated from the auction house of garage sale items to a "Marketplace" sales model of new items; (80%) at a fixed price (86%) from global sellers. The same model landed China's Alibaba on The Office of the United States Trade Representative's Notorious Markets List - a condemnation and designation reserved for the world’s most notorious markets for counterfeit goods.

eBay receives a transaction fee for each fake sold and profits soar. The downstream consequences are destroyed U.S companies and retailers, lost U.S. jobs and deceived consumers spending good money for bad products. The problem isn’t just the well-known fakes; watches, shoes and handbags, but a vast counterfeit universe of auto parts, cosmetics, drugs, electronics, sporting goods, toys, and much, much more. Even inarguably fake items - items that bear a trademark, but do not even exist in the authentic product line, are repeatedly offered on eBay.

Consumers likely would not suspect the items below, but they are all fake - none exist in an authentic product line. Despite repeated complaints, they are still sold on eBay.

(Photo: ©The Counterfeit Report)

Monster® never made a Tron model headphone. Supra® never produced a "Justin Bieber" model skateboard shoe, and the Drew Technologies® Mongoose® Pro vehicle diagnostic interface cable was never made in purple. Vans® does not make or license the use of the VANS® trademark on iPhone 6,7 or 8 phone cases. Authentic Dr. Numb is not made in the 10g size shown here. Counterfeit Dr. Numb® 5% Lidocaine Cream submitted for ingredient testing did not contain any Lidocaine as indicated, but Tetracaine, a potentially fatal drug. Composite Resources, Combat Application Tourniquet® (C-A-T®), has been supplied to the U.S. Military, police, first responders and the public worldwide for the past decade but was never produced in tan. Counterfeit versions of the C-A-T tourniquet have catastrophically failed during actual life-saving applications. Your life could literally be riding on this counterfeit vehicle suspension part. Group-A Autosports® never made the Skunk2® lower suspension control arm in the colors shown. An automobile suspension part failure can cause a catastrophic accident with fatal consequences to those in, and around, the counterfeit equipped vehicle. The various micro SD® memory cards shown were never produced in the authentic product line in the capacities shown, or licensed by SD-3C, LLC, the right holder of the microSD® trademark. ICOM® never made a V87 model amateur radio, and pharmaceutical giant Novartis does not make its OTC anti-fungicide medication, Lamisil® in the liquid form shown.

Everyone knows counterfeits are illegal, yet through huge legal loopholes, and virtually immune to prosecution, IP laws and safety standards, eBay continues to allow counterfeits and avoid prosecution. Foreign sellers are difficult to identify and also escape liability.

Counterfeit notices can be sent dozens of times for weeks, yet the fake products still remain. Complaints to senior management and corporate counsel fall on deaf ears. Sellers of removed counterfeit items can easily relist, or return under new accounts. eBay does not notify sellers they have received a reported counterfeit, even if it's dangerous or deadly.

Companies that facilitate criminal activity and profit from dishonest sales which impact consumer safety, jobs and public trust create a public perception of deception and impunity. However, their reputation damage is only a small part of the problem: the value of counterfeit and pirated goods is forecast to grow to $2.8 trillion, and cost 5.4 million net job losses by 2022³ while manufacturer's brand integrity is tarnished or destroyed.

Consumers seeking authentic items would be safer and better served buying directly from the manufacturer or authorized retailer.

Footnotes:
¹ eBay Counterfeit Policy; "You can't list replicas, fakes, counterfeits or other illegal copies on eBay"

² Wade Shepard, "As Amazon And eBay Flood With Illegal Goods From China, Beijing Cracks Down On Foreign E-Commerce"
Forbes (Nov. 22, 2017), available at https://www.forbes.com/sites/wadeshepard/2017/11/22/as-amazon-and-ebay-flood-with-illegal-goods-from-china-beijing-cracks-down-on-foreign-e-commerce/#7223f1604dfd

³ THE ECONOMIC COSTS OF COUNTERFEITING AND PIRACY
The report was prepared for The International Chamber of Commerce, Business Action to Stop Counterfeiting and Piracy unit (ICC BASCAP) and The International Trademark Association (INTA)
January 2017
Frontier Economics, Ltd.