Is the online auction a threat to manufacturers? Online auctions such as Ebay, have come under threat by the EU's competition laws. The competition law gives the Brand owners/Manufacturer of a product the right to demand that a product is taken off the online auction site and in some cases the auction site owner could face legal proceedings. The manufacturers argue that sales of illegal or fake items on the Internet is damaging their profit line and reputation. In a landmark case recently this was emphasized when a major conglomerate took a auction site to court and won, The major online auction site having to pay 40 million euros in compensation. Microsoft have also been involved. The amount of fake or illegal operating systems has harmed the software companies sales, however it has taken a different approach. Instead of pursuing the online auction sites direct, it has decided to pursue the counterfeiters. Microsoft argue that it is better to partner with online sites and rooting out the counter fitters rather than punish the online auction sites direct. The online auction sites argue that the brand owners/manufacturers are not just pursuing illegal or fake items, but all items sold on there sites. According to a press release by Online auction site, Ebay :- 'Ultimately, what is at stake is the right of sellers to compete fairly in the wider online marketplace, and the right of buyers to be able to access the best possible deals from the widest possible selection of goods.' This assumes that brand owners, are not just protecting themselves against lost sales of counterfeited products, however ebay argue the amount of sales of these items on the online auction site are so small, that this is not the only issue. Some buyers have also found increasingly difficult to obtain products from suppliers, as they withhold stock to buyers, who wish to sell there items on online auction sites. Auction Sites Fight Back Although for the moment it is only European manufacturers who seem to be tackling the online auction sites direct, there could be a challenge to the EU competition law that gives the right to the manufacturers to have the items removed from their sites. This law was set up to protect companies from the floods of illegal and fake items placed on the net. However, the online auction sites argue that this is used as a way for manufacturers, to stop competition and allowing users of the sites to the best possible deals.
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