Ebay: the counterfeit capital of the world

By Douglas A. McIntyre Published Apr 11, 6:08AM EDT

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Imagine this. Some large brand companies believe that 99% of the items sold under their names on Ebay (NASD:EBAY) are counterfeit. Louis Vuitton and Christian Dior are suing the online auction company to try to get fake versions of their products off Ebay’s site.

According to the FT; "One designer clothing and accessories brand said it had seen the number of fakes using its brand name on Ebay rise dramatically in the past year, from 16,400 in 2005 to 20,827 in 2006."

It puts Ebay in a bit of a bind. It can try to police fakes on its websites but with hundreds of thousands if not millions of counterfeits that would be almost impossible. It could take some of the offenders to court and make examples of them.

But Ebay makes money on the knock-offs so it is a bit hard to say how diligently they are willing to work to harm their own business. Whether it is their legal responsibility to check all the credentials of every seller is an open question.

What is not an open question is why the US government is spending its time complaining to China about pirated and counterfeit items sold in the big Asian country when it could just go over the Ebay headquarters and watch the world’s best fakes being sold on any PC in the universe.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.