Diabetes Health Pharmacist: eBay Faces A Credibility Crisis

Although this may not relate to diabetes medications or products for you, we thought you might be interested in seeing this:

May 16, 2016, Los Angeles, CA – It’s an age-old crime: stealing. But it’s not about picking a pocket or holding up a bank. It’s robbing people of their ideas, inventions, and creative expressions—what’s called “intellectual property” — everything from proprietary products and parts, to movies, music and software. It’s the business of counterfeit and fake goods.

e-Commerce giant eBay® (EBAY) is no stranger to allegations of selling counterfeit goods and faces a “credibility crisis” for failing to adhere to its own policies, crack down on counterfeit goods listed on its website, altering feedback, and making it easy for counterfeiters, the world’s largest criminal enterprise, to peddle $1.7 trillion in counterfeit goods to unsuspecting consumers.

Companies that facilitate criminal activity and benefit from the proceeds of dishonest actions which impact jobs, consumer safety and public trust create a public perception of deception and impunity. However, reputation damage is only a small part of the problem: counterfeiting costs US manufacturers over $250 billion, and US workers over 750,000 jobs.

eBay claims “You can’t list replicas, fakes, counterfeits, or other illegal copies on eBay

  • Nevertheless, The Counterfeit Report® received over 2,000 counterfeit products1 from eBay sellers, representing over 400,000 counterfeit items listed or sold to duped eBay consumers.
  • Press Release identifying the particularly alarming sale of fake FBI and Police badges and identification on eBay was emailed to eBay CEO Devin Wenig. The email was viewed 302 times, yet a week later, the eBay listings remain.

As a consumer, you would expect to be notified that you may have purchased a dangerous, fraudulent or deadly product on eBay and are entitled to a refund under eBay’s “Money Back Guarantee” — the fact is, that doesn’t happen.

  • In practice, a buyer viewing their eBay purchase history is misled with the message “If you’ve already sent payment, the sale should process as normal and you don’t have anything to worry about.” The opposite may be true, and buyers could have a lot to worry about.

While buyers identifying counterfeit items can request a refund under eBay’s Money Back Guarantee, there is a catch:

  • eBay directs buyers to return the item to the seller, a nonsensical solution promoting resale;  against eBay policy and illegal. If challenged, eBay requires a manufacturer’s written counterfeit confirmation in just 2 to 5 days, and arbitrarily requires that “in order to continue with the investigation of your Money Back Guarantee, you must destroy and discard the item.” Clever, but without the counterfeit item, buyers have no evidence for their unresolved eBay claim, credit card refund or counterfeit feedback.

eBay User Feedback should provide valuable insight to the Buyers and Sellers involved in a transaction, allowing each to build reputations that are based on ratings and comments left by their trading partners. eBay Feedback consists of a Positive, Negative, or Neutral rating, along with a short comment, but;

  • Under eBay policy; “Sellers can leave only positive ratings for buyers. That means buyers should feel free to leave honest Feedback without fear of retaliation.”
  • Inexplicably, Negative “Counterfeit” feedback left to protect consumers from dishonest seller practices just “disappeared” in over 10% of the confirmed counterfeit item cases opened by The Counterfeit Report®. eBay’s Leadership Team had no explanation why the “in policy” feedback was removed, while eBay Counsel Amber Leavitt acknowledged, but never responded to The Counterfeit Report’s inquiry.

eBay touts its Verified Rights Owner (VeRO) program as “the most effective tool to combat the sale of counterfeits on eBay.

  • eBay claims to remove about 500,000 infringing items with its VeRO program, after manufacturers notify VeRO, in what is best described as a “whack-a-mole” process — they just pop up again with the same sellers. eBay earns about  $2 billion in profits and claims to “spend as much as $20 million each year on tools to promote trust and safety on its website.”
  • In response to manufacturer complaints, The Counterfeit Report®, as a manufacturer’s authorized agent, submitted dozens of intellectual property infringement notifications to VeRO — some as many 10 times for the same listing. The process was ineffective, dysfunctional, and included unresponsive, ambiguous auto-responder messages. Some listings required a test purchase to confirm authenticity before being removed by VeRO’s “authenticators.”

eBay claims it’s “just a venue” and has immunity under eBay’s often cited 2008 Tiffany (NJ) Inc.  v. eBay Inc.2 lawsuit.

  • However, eBay allows staffers to determine if items are accurately described in counterfeit purchase dispute cases, despite the manufacturer’s written counterfeit confirmations — an action that landed eBay in arbitration.
  • Even when written manufacturer’s counterfeit confirmation is provided for trademarked items that don’t exist in the manufacturer’s product line, eBay still allows the fake items to be listed, and remarkably, sends direct emails solicitations to consumers to purchase the fake items – a practice that landed eBay in Federal Court3 – yet the practice continues.

Some issues are debated – and decided – in the court of public opinion where consumers will decide if eBay must provide honest services and present information in a clear, truthful and professional manner. Other issues will be decided in a court of law.

eBay can adopt real and effective solutions to end the counterfeiting problem that it enables.  Will it?

  • Footnotes;
  • 1The Counterfeit Report purchased trademarked products including; counterfeit auto suspension parts, Apple iPhone® chargers, which have been implicated in starting fires, injuries and a death, as well as over-the-counter (OTC) drugs, fake FBI and Police badges and identification, electronics, sporting goods, children’s toys, fragrances and other items.
  • 2“An online advertiser such as eBay need not cease its advertisements for a kind of goods only because it knows that not all of those goods are authentic. A disclaimer might suffice. But the law prohibits an advertisement that implies that all of the goods offered on a defendant’s website are genuine when in fact, as here, a sizeable proportion of them are not.” (Tiffany (NJ) Inc. v. eBay Inc., — F.3d —, 2010 WL 1236315 (2d Cir. Apr. 1, 2010).  
  • 3Wimo Labs, LLC  v. eBay Inc. Case 8:15-cv-01330


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