The CNET Lounge forum

General discussion

Tiffany Sues eBay for Selling Fakes

by Jay730 / February 2, 2006 2:41 PM PST


Tiffany & Company, the famous New York-based jewelry retailer, is suing San Jose, California-based online auction firm eBay for allowing its Web site to be used to sell counterfeit jewelry.

The landmark lawsuit also alleges that eBay, in addition to facilitating sales of fake Tiffany goods, also makes millions of dollars from fees charged for counterfeit sales.

Two years ago, Tiffany bought several hundred items on eBay and found that three quarters of the items purchased were counterfeit.

The Tiffany lawsuit, which originally was filed in 2004 in a New York State court, is expected to go to trial by the end of this year, according to press reports.

Death Blow

If Tiffany wins its case, eBay's business model could suffer a severe blow, as this would open the door for other brand owners to sue it over counterfeit sales.

But eBay claims it is only a marketplace that brings together buyers and sellers, and cannot be held responsible for sales of counterfeit items.

"We are disappointed that Tiffany filed the suit, given that we have cooperated with their brand-protection efforts for several years through our Verified Rights Owner (VeRO) program," said Hani Durzy, an eBay spokesperson. "Through VeRO, we have worked with Tiffany to develop substantial proactive monitoring efforts and given them the tools to report problem listings, which we promptly remove."

Durzy said that eBay will continue to cooperate with Tiffany along these lines but will fight the legal action because "its claims are without merit."

"If the court finds in Tiffany's favor, this would set a precedent and would place additional pressure on eBay to ascertain the provenance of goods sold," said Stacey Quandt, research firm Aberdeen Group's director of security solutions and services.

"Determining whether this would be a death blow depends on the damages and the number of fraudulent goods sold on eBay," said Quandt. "The outcome could also spark both legitimate and fraudulent insurance offerings to protect consumers."

Hidden Agenda

Martin Reynolds, an analyst with research firm Gartner, said he suspects Tiffany has a hidden agenda in wanting to sue eBay. "Tiffany would really like to restrict secondary sales of its products, as this would then force people to buy exclusively from Tiffany," he said. "The net effect would be to increase Tiffany's sales."

It is not cost-effective for Tiffany to go after all the second-hand antique stores that sell genuine and counterfeit Tiffany products, Reynolds said. "But if this lawsuit scares eBay into taking all Tiffany products off its Web site, then Tiffany will have managed to strike a major blow against second-hand sale of Tiffany items."

Reynolds said that eBay has a policy of immediately taking action when it determines that counterfeit products are being sold on its Web site.

"EBay has a team of people and also computer systems, which trawl its site in search of counterfeit items," he said. "But it is not possible to catch everything. If someone displays a photograph of some Tiffany jewelry, how can eBay tell whether it is genuine?"

If Tiffany is going to sue eBay for profiting from counterfeit sales, then it should also go after the credit-card companies whose cards are used to pay for purchases of counterfeit items, Reynolds said.

"You could even argue that it should also sue the U.S. government, because people use U.S. banknotes to buy fraudulent items," he said.

Slippery Slope

"It becomes a slippery slope when a marketplace like eBay is held responsible for the products sold on the site," said Forrester analyst Sucharita Mulpuru. "It's like the Pasadena flea market at the Rose Bowl being held liable for every fake product or tchotchke sold through its venue."

The responsibility of policing items really rests with the buyer when products are being resold, said Mulpuru, whether it's a swap meet or an online auction.

"That said, I see Tiffany's point of view," said Mulpuru. "It diminishes their brand when fake products are sold under their name, especially when those products are positioned as genuine."

Mulpuru believes it will be impossible for Tiffany to succeed in getting every fake item removed from eBay. "I would be really surprised if eBay is ultimately held liable for misrepresented items on its site," Mulpuru said, suggesting that the lawsuit's main purpose might simply be to send a signal to illegal resellers that someone's watching.

Discussion is locked
You are posting a reply to: Tiffany Sues eBay for Selling Fakes
The posting of advertisements, profanity, or personal attacks is prohibited. Please refer to our CNET Forums policies for details. All submitted content is subject to our Terms of Use.
Track this discussion and email me when there are updates

If you're asking for technical help, please be sure to include all your system info, including operating system, model number, and any other specifics related to the problem. Also please exercise your best judgment when posting in the forums--revealing personal information such as your e-mail address, telephone number, and address is not recommended.

You are reporting the following post: Tiffany Sues eBay for Selling Fakes
This post has been flagged and will be reviewed by our staff. Thank you for helping us maintain CNET's great community.
Sorry, there was a problem flagging this post. Please try again now or at a later time.
If you believe this post is offensive or violates the CNET Forums' Usage policies, you can report it below (this will not automatically remove the post). Once reported, our moderators will be notified and the post will be reviewed.
Popular Forums
Computer Newbies 10,686 discussions
Computer Help 54,365 discussions
Laptops 21,181 discussions
Networking & Wireless 16,313 discussions
Phones 17,137 discussions
Security 31,287 discussions
TVs & Home Theaters 22,101 discussions
Windows 7 8,164 discussions
Windows 10 2,657 discussions


Help, my PC with Windows 10 won't shut down properly

Since upgrading to Windows 10 my computer won't shut down properly. I use the menu button shutdown and the screen goes blank, but the system does not fully shut down. The only way to get it to shut down is to hold the physical power button down till it shuts down. Any suggestions?