When Will eBay Get Serious About Counterfeits?

eBay is flooded with counterfeits, fraud, and scams.

October 17, 2019 - Los Angeles, CA – Everyone knows selling counterfeits is illegal, yet through huge legal loopholes and virtually immune to prosecution, IP laws, and safety standards, eBay skirts liability for flooding the consumer e-commerce marketplace with an inexhaustible supply of counterfeit, fake, and replica products.

Consumers don't have a chance of identifying the dangerous, deadly, and often visually indistinguishable counterfeit and fraudulent goods, but eBay still receives a transaction fee and profits from the fake item sales. The downstream consequence is destroyed U.S. companies and retailers, lost U.S. jobs, and deceived consumers spending good money for bad products.

eBay hasn't escaped scrutiny for its shady practices, illusory counterfeit policies, and ineffective website policing. The U.S. Government Accountability Office ("GAO") recently conducted an undercover investigation of e-commerce counterfeit goods sales and reported that about 50% of the items it purchased from eBay were counterfeit. Federal Communications Commission ("FCC") Director Michael O'Rielly sent a letter to eBay's then CEO, Devin Wenig, telling him to knock off the counterfeit electronics. Peter K. Navarro, White House assistant to President Trump for trade and manufacturing policy, wrote a harsh condemnation in the WSJ; "when you purchase brand-name goods through online third-party marketplaces like Alibaba, Amazon, and eBay, there's a good chance you'll end up with a counterfeit."

The Counterfeit Report, an award-winning consumer advocate and counterfeit watchdog, found over 3.3 million counterfeits and replica items on eBay and removed over 2 million at the request of the brand-owners. A review of just a handful of selected counterfeit products revealed that consumers purchased over 880,000 of the fakes.

eBay, once a popular auction house of garage sale items, has migrated to a global "Marketplace" model allowing unvetted U.S. and cross-border sellers (about 80% of eBay business) to sell just about anything they want on eBay, including fake and fraudulent items. If the items are removed, the sellers may remain and repeatedly list fakes. Complaints to eBay senior management and corporate counsel, Marie O'Huber, fall on deaf ears.

While most people would expect eBay to embrace the reports, notify consumers, and work together to remove the counterfeits to provide a safe consumer environment, eBay chose to do the opposite. eBay blocked The Counterfeit Report's accounts, banned test purchases, and commissioned the global law firm giant, O'Melveny and Myers, to threaten; "Any attempt to circumvent that ban may result in eBay taking further steps, including but not limited to legal action." Consumers lose, but a clear win for eBay profits and counterfeiters.

The problem isn’t limited to the well-known fakes such as watches, shoes, sunglasses, and handbags, but includes a vast counterfeit universe of auto parts, cosmetics, OTC drugs, clothing, electronics, sporting goods, toys, and much, much more. Even inarguably fake products - items that bear a trademark but do not even exist in the brand owner's authentic product line repeatedly appear on eBay. For example:

(Photo: ©The Counterfeit Report)

Row 1 - 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, 8, 9, 10, or X phone cases. 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 color shown. An automobile suspension part failure can cause a catastrophic accident with fatal consequences to those in and around the counterfeit equipped vehicle.

Row 2 - Authentic Dr. Numb anaesthetic is not made in the 10g size shown. 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. eBay listings offered drug pill dies to make replica drugs including Oxycodone, Alprazolam, and Xanax. The Drug Enforcement Administration ("DEA") and FBI do not sell their badges on eBay, but counterfeits are available to terrorists, child predators, and other criminals.

Row 3 - The various micro SD® memory cards shown were never produced in any authentic product line, in the capacities shown, or licensed by SD-3C, LLC, the right holder of the microSD® trademark. Pharmaceutical giant GSK does not make its OTC anti-fungicide medication, Lamisil®, in the liquid form shown.

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. The value of counterfeit and pirated goods is forecast to grow to $2.8 trillion and cost 5.4 million net job losses by 2022 states a 2017 International Chamber of Commerce Report.

Consumers seeking authentic and safe items should avoid eBay and buy directly from the manufacturer or authorized retailers.