As we discussed in the beginning of our article series on eBay's VeRO program, eBay originally created the program to position itself within a safe harbour available in the 1998 Digital Millennium Copyright Act. The DMCA holds site owners responsible for site content that may infringe copyright. But, if the site owner vigorously enforces rules against copyright infringement, and actively roots out offenders, they are protected. Thus, VeRO.
VeRO affects everyone associated with eBay, but the effect can be quite differential.
eBay itself is affected by VeRO in more than just its insulation from liability under DMCA. The VeRO program is a cost to eBay which it bears as a risk mitigation cost. It's probably true that VeRO has some public relations value to eBay, because it's a way to show buyers that eBay is protecting their interests by eliminating fake goods. And, in fact, the program probably does eliminate some percentage of the fake products that are sold on eBay, so it does actually protect.
Less obvious but probably also true, eBay tends to favour Power Sellers in its philosophy and policies. Power Sellers are more likely to have the means to fight a VeRO delisting, and have the credibility to avoid being a target. That's a plus to a certain extent, but the advantage is gained off the backs of the small sellers who may well be selling genuine articles but are less able to defend their right to sell, and do not have the market power to stay above the fray.
Clearly, those who own the intellectual property rights to products, images, content and so on deserve to have the opportunity to stop scammers from devaluing their products by substituting fakes or by selling their intellectual property at a lower price on eBay, creating competition for their mainline sales distribution channels. However, since rights owners do not have to provide more than a category of infringement as the basis for their complaint, it's possible for these owners to use the VeRO program to control the eBay marketplace in ways that far exceed the goals of the program. Many eSources members say that there are some manufacturers that simply don't allow their products to be sold on eBay, regardless of whether or not they have been legitimately purchased and fairly described in the listing. Although eBay representatives have stated that they will not condone this anti-competitive behavior, and will stop it when they find it, many of our members believe that eBay simply isn't in a position to have much effect without a great deal more investigation and oversight. What would be the upside for eBay? More expense in order to butt heads with manufacturers? We can probably count on eBay to react correctly if they find a problem; we're not likely to see eBay working on this issue proactively.
Legitimate eBay sellers should gain some competitiveness through the program, because VeRO is designed to take away the unfair advantages available to those selling fakes as real branded goods at much lower prices than the legitimate seller can afford to offer. However, this seems to be a small percentage again when compared to the level of risk for the average seller. If a seller is targeted, it's very difficult to find out exactly why. Members tell us that, when they contact the claimant, they often do not get a response. eBay usually will not be any more specific in their explanation than to tell the seller to review eBay's listing policies. If the seller takes a best guess at the problem, re-lists the item (with say a different description or image) and was not correct in their theory, the item can be delisted again and the seller can be suspended. Suspensions can range from days to months to permanent.
During the delisting process, if items have been sold, eBay sends an email to purchasers explaining that the item has been removed and to request money back. This kind of inflammatory communication can be extremely detrimental to a seller's credibility with customers. Plus, the suspension reduces the ability to make a living during that time. Legitimate sellers have a lot at stake in the VeRO program; that's why we have created this article series to give you the greatest potential to stay out of trouble and the greatest chance of rectifying a problem.
Counterfeit sellers are at extreme risk under VeRO and that's great. Nobody needs people on eBay who are misrepresenting the products they are selling – that can only serve to hurt everyone. We do find, based on our members' feedback, that some sellers who have been caught by the VeRO program honestly did not know that they were selling fake goods. But, frankly, it is the seller's responsibility to be sure that they understand what their products are, so that while we sympathise with the dilemma, we have to say that if you are going to offer products on eBay, you have to be responsible and be sure you know what you're doing. For those who are deliberately dishonest, you are getting what you deserve.
Yes, counterfeit sellers can also be considered to be unscrupulous, but we're talking about a different problem. There are sellers on eBay who pose as rights owners, willingly sign their name under the pains and penalties of perjury, and report their competitors for non-existent violations in order to knock others out of the marketplace. As a comparison, in a submission to the Telecommunications Carriers Forum concerning proposed updates to New Zealand's copyright law, Google noted that “more than half (57%) of the takedown notices it has received…were sent by business targeting competitors and over one third (37%) of notices were not valid copyright claims”. This is a huge issue. It's hard to protect yourself against these kinds of VeRO complaints, but in Part IV and Part V we will give you some suggestions that may help.
There is reason for and value in the VeRO program but, in our opinion, eBay does not do enough to protect legitimate sellers from harassment.