Every company with goods for sale on the Web faces huge potential liabilities due to counterfeit activity, and the breadth of the potential fraud is enormous. A pending lawsuit by Tiffany & Co. alleges that 83 percent of Tiffany products sold on eBay are counterfeit. And a French court recently ordered eBay to pay luxury goods manufacturer LVMH Group $61m in penalties, based on allegations that 90 percent of LVMH's products sold on eBay--which include Louis Vuitton, Dior, Moet, and other brands--were counterfeit.
The eBay example highlights a problem that all manufacturers whose products are sold through Web-based marketplaces are facing with increasing trepidation: Not only must the buyer beware, but also it's up to the manufacturer to police the Web or face the consequences.
Source: Managing Automation, http://www.managingautomation.com
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