French Organization Plans Suit Against E-Bay

French firms target eBay in anti-counterfeit drive By Nick Antonovics

A French industry group plans to file a complaint with prosecutors seeking damages from eBay Inc. and other Internet auction sites for the sale of counterfeit products on their Web pages, the group's chairman said.

Marc Antoine Jamet, chairman of France's Union of Manufacturers (Unifab), told Reuters that the complaint, due to be filed next month, also aims at forcing the sites to clamp down on product pirates.

"There is a continent which makes the fakes, which is China, and there is a continent where they are sold, and that is the Internet," he said.

Other auction sites in the firing line include those run by privately held, Yahoo Inc. and Japan's Rakuten, Inc.

But the main focus is eBay, with which Unifab has held more than a dozen meetings in the last two years, Jamet said.

"We think eBay is perfectly capable of policing its site, but they offer to take action only after the fact. They refuse to act pre-emptively," he said.

"We think they have the IT to manage their sites, to track bank accounts and ownership."

EBay spokesman Hani Duzry said the company operates an anti-counterfeit goods program and constantly monitors auctions for blatantly infringing products and removes them.


"We don't allow counterfeit items on the site. It is against eBay policy. It is illegal. We are committed to working with copyright owners on this," Duzry said.

Ebay "makes it easy," he said, for any copyright owner to contact eBay to report infringing products in order to have eBay remove them.

Jamet said, however, that the firm had refused Unifab's request to pro-actively shut down merchants of counterfeit goods in the same way it agreed in 2001 to ban listings of Nazi memorabilia and from groups such as the Ku Klux Klan.

Unifab's complaint will contain concrete examples of counterfeit goods found for sale on the Internet, he said.

Leather goods maker Louis Vuitton, a unit of LVMH, the world's largest luxury goods group, last year found 235,000 examples of counterfeit articles on 340 eBay pages.

In one case, it tracked more than 100 copies of the same article being sold within one hour, said Jamet, who is also a senior executive at LVMH.

Other luxury goods companies are also targets of counterfeiters, while Unifab members in sectors from pharmaceuticals to spare car parts support the action, he said.

Unifab had decided to move now, he added, because the problem of counterfeit sales had exploded.

Three years ago, none of the French firms affected -- including big-name luxury goods makers such as LVMH, Hermes International and Chanel -- monitored Internet traffic.

Now, many have teams who have spent months gathering evidence and assembling a case.

"It's a huge phenomenon, which has multiplied by 25 times in the last five years," he said.


Jamet said Unifab would be asking prosecutors to seek damages and interest from the auction sites in relation to the alleged losses suffered by the firms. In the case of some luxury goods companies, these ran into millions of euros, he said.

Unifab also wants to prosecute the sites for providing the means to resell counterfeit goods, a charge the French luxury goods industry has successfully brought against shop owners in Beijing's silk market and on New York's Canal Street.

In addition, it is asking the French government to revise its laws on electronic commerce to make online auctioneers "co-responsible" for the goods that are sold on their sites, Jamet said.

Unifab believes its case has been strengthened by a Paris court's decision in June to fine online search engine Google 300,000 euros ($385,000) over advertisements for counterfeit goods generated by its sites. Google had based its defense partly on the existing French e-commerce law.

France is home to much of the world's luxury goods industry and the French government has taken steps in the past three years to toughen its laws against counterfeiting.

The government tried last month to broker a friendly solution to the row between Unifab and the auctioneers, but it was rejected by the industry group which believed it did not go far enough.

Unifab estimates counterfeiting represents 5 to 9 percent of global trade, or 200 billion to 300 billion euros a year in lost earnings for manufacturers. Losses in France alone exceed 6 billion euros, it says.

($1=.7791 Euro)

(Additional reporting by Eric Auchard in San Francisco)

Copyright 2006 Reuters Limited.

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[TELECOM Digest Editor's Note: As the writer points out, E-Bay is one of the worst offenders. And they do _NOT_ make it easy to report any problems at their site. If I get one, I get a couple dozen daily 'complaints' from so-called users of E-Bay which allegedly are lodged against me daily. I have done business with E-Bay exactly one time in my life; when I sought out and purchased the Nokia GAIT phone several months ago. Yet, there are dozens of complaints daily saying that I either 'failed to ship' or 'failed to pay for what I purchased' from users there. Now, one of the more common, I guess, tactics by phishers and scammers is to send letters of this sort out, so I could excuse E-Bay for its role in it, except that (taking E-Bay's web site advice) to send the offensive email to '' does no good at all; in fact, I doubt that is even a working address. I sat here two afternoons ago, using emacs and Note Pad to gather up a huge number of those farces which get sent out to whoever on the net is still enough of an idiot to pay attention to them, and shipped off the whole bunch to '' . About 10 minutes later it all bounced back at me saying 'spoof' is only used for certain things at E-Bay and my mail would not get delivered or read. Now, their sister company, PayPal uses '' as an address to forward all that crapola to; but appartently E-Bay does not. I wish a good, reliable honest auction site could be started on the net. PAT]

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Nick Antonovics, Reuters
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