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Dodgy Bay

by Marc Butterwood

It’s a very big deal this e-bay business. The sole proprietor of the world’s classifieds ads, or as good as, is something like the 59th biggest economy in the world. It's bigger than one of them oil producing countries. And if its fake goods you’re after, you’d think all the cowboys would be at home in Yahoo! auctions but they all seem to have settled down well at e-bay.


For all its protection programmes, “insurance” via its recommended payment method Paypal, and generally idle chat e-bay doesn't really do much about fakes being sold on its site. It sees itself as a market place/space, and as it provides the space it’s not really responsible for what’s sold there. But e-bay do then still take money from its fakes. And they’re everywhere. Of the brands I search for, I find fake adidas trainers, fake Stone Island jackets, fake “google” jackets from CP Company, fake Armani and Paul Smith jeans and fake DVD’s.


Of course we’d be very stupid to say there were a lot of fakes on e-bay or other auction sites without a pop survey, so this “writer” opted to do a little bit of investigative journalism for once, rather than sit on his fat arse ranting about police and coats.


The sample was this – the brands of Sportswear Company SPA – Stone Island , Stone Island Denims, and separately we will also look at CP Company. I’ve flogged articles to death going on about these brands, so I apologise for bringing them up again. But its easier to tell a fake CP Company piece from fake adidas trainers – apart from originating in Hong Kong and having an iffy price, most of the adidas fakes are high grade and difficult to tell from the real thing.


Anyway back to the sample. This included 2248 SI or SI Denims pieces over a ten day period in February, available to the United Kingdom via an auction web site. Of these, we found as follows.


Genuine Items – 309

Indistinguishable/Spam Items - 87

Fake Items – 1852


Meaning that in this sample, we found that over 82% of all Stone Island and Stone Island Denims products available on through that search at that time were fake. If we take that 10 day period as representative of the year, we times the amount by 36.5 to see that 67,598 fake items are sold from these manufacturers via this site each year. We worked out the average of the fake product sold, from hats to coats, in one unit as representing £41 based on a sample of ten items.


If we were to take 5% as the cut that this auction site would use, which is fairly standard, this site would make £138,575 per year if all the items sold. Even if they didn’t, the charge for simply putting the fakes up for sale would alone be £54,078. At worst then they would get £192,653 for these fake sales. Unless you’re using a recommended payment system via credit card, which would itself take £110,860 for processing this, although how much of that is profit we don’t know. Bottom line is this site could be making from this sample £385,306 from SI and SI Denims fake sales. Add European fakes which there are less of, and the CP Company branded fakes and you’re looking at potentially well over half a million pounds realistically being made from the sale of the fake merchandise of three brand names. World wide, per year. Of course they would have to pay VAT or tax on that where appropriate. But that’s just some relatively small brands.


But not is all lost. E-bay is one of those auction sites which is charged by many to be selling fake goods, but couldn’t possibly have been used in our sample. The top end jewellery brand and store Tiffany’s found that when it bought a load of Tiffany’s jewellery via e-bay, all of its samples were fake. It estimated that roughly 80 – 90% of Tiffany goods on e-bay being sold were fake. So Tiffany’s decided to sue – few people had the financial clout to take on e-bay in the courts but Tiffany could afford this.


Now this could go one of two ways. E-bay would have won, or if seen through Tiffany could have got the verdict that e-bay was responsible for the goods sold on its site. Nobody anticipated way three – it was feasible that e-bay would approach Tiffany’s out of court, offer them a large amount of compensation for fakes sold, and the claim goes away. This would be good business as if e-bay were ordered to pay millions on compensation anyway and million court costs, in the US this would be considered a landmark verdict. It would have meant everyone who owned a brand and noticed fakes being sold through e-bay would have sued and won. It could have been the end of e-bay really.


So since the suit was filed, 2005 has passed without much word about proceedings at all. Which would suggest that the compensation action had been done, and we the ringside punter got no satisfaction and no meaty fight. And we at Swine actually went to the effort of contacting Tiffany’s who refused to comment on this speculation.


But stop the press! On the 6th if February, James Swire of Arnold and Porter, the law firm representing Tiffany’s, announced that the case was going ahead, would hit court this year, and e-bay was preparing its defence. We’ll get some action this year then. 10% was wiped off the value of e-bay stock as soon as Jamesy opened his mouth – a few very expensive words.


So we might get e-bay properly policed, or we might we even see it destroyed? Who knows? But it has plenty of financial clout, and few experts give Tiffany much chance of a ruling. In the meantime, I’ll have one of them goggle jackets at £50 buy it now please.



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