Thursday, September 21, 2006

Fashion labels sue Ebay over sales of fakes Fashion labels sue Ebay over sales of fakes Fashion labels sue Ebay over sales of fakes is troubling. The problem is that eBay is inadvertantly helping cloners of luxury fashion brands by allowing knock-offs to be sold as originals. And these companies have made their money by keeping strict control over their marks and distribution. So, no surprise that they want to shut down the sale on eBay of knock-offs.

But the problem is that eBay does provide a major service to consumers worldwide by acting as a much more efficient market in many products. If these luxury brands manage to shut down the selling of their brands on eBay, in the name of shutting down the selling of knock-offs, they also shut down the resale of their own products. That might be fine with them, forcing their customers into the vendors' preferred distribution network, but it is bad for consumers who often can get significantly better prices on genuine products this way, either because the product is being sold outside the normal distribution chain, or it is used.

Of course, the question arises, why should it end with Louis Vuitton and Christian Dior. Why not HP? This summer I picked up two new HP printers on eBay for about $80. Suggested retail on the one was around $500, and $100 for the other. Of course, it is far harder to fake an HP printer than a Louis Vuitton handbag.

The difference, of course, is that there really is a big difference in quality between a $100 inkjet printer and a $500 inkjet printer. In my case, the $500 printer weighs about three times as much, comes with two removable 150 page cassettes, and uses high volume ink cartridges (which was one of my reasons to buy it). Everything about it is a lot sturdier. But what is the difference in quality between a $500 handbag and a $100 knock-off? Will the $500 handbag last 5 times as long? Highly unlikely. Rather, you are paying that premium mostly for the name.

My hope is that eBay can figure out a way of restricting resale of these name brand luxury goods to countries not in thrall to the fashion industry (i.e. France and maybe Italy). Then, the people in those countries can suffer for their judiciary, and not pass that cost on to the rest of the world.

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