eBay Faces Federal Racketeering (RICO) Lawsuit For Trafficking In Fake Products

August 20, 2015, 2:30PM. By LAS Staff Writer

Los Angeles, CA (August 20, 2015) (Press Release)The R. Rex Parris Law Firm has filed claims against eBay® and PayPal® and various eBay Sellers in Federal Court under the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Lanham Act claiming the defendants knowingly and deliberately facilitate, proliferate and profit from the ongoing sale of counterfeit and fake products on ebay.com.

“This landmark RICO lawsuit against eBay identifies ongoing practices by the $18 billion e-commerce giant which are aiding a $1.7 trillion global criminal enterprise with the results threatening the health and safety of American consumers and the U.S. economy and damaging manufacturer’s reputations and brands,” said lead attorney R. Rex Parris.

“A two-year investigation by The Counterfeit Report®, a consumer anti-counterfeiting advocate, provided investigative detail and insight into eBay’s ecosystem to advertise, list, manipulate, sell, finance, ship and encourage the sale of counterfeit and fake products. Most importantly, eBay’s response to The Counterfeit Report® investigation confirms that eBay is “willfully blind” to the rampant trafficking in counterfeit and fake products on ebay.com,” added Parris.

The detailed 106-page lawsuit asserts that because eBay and PayPal cannot continue to enjoy the enormous profits derived from the proliferation of counterfeit and fake products sold on the eBay website if the intentional infringing sellers are excluded, eBay’s policies and practices are designed to, among other things, (i) promote the unlawful activities of its unauthorized sellers by soliciting eBay buyers to purchase fake products knowingly using listings that infringe on registered trademarks, (ii) conceal and protect the identity of the sellers who are responsible for intentional trademark infringement on the eBay website, and (iii) ignore evidence of the unlawful activities by its unauthorized sellers. According to the Complaint, to avoid liability, eBay’s policies and practices are designed to manufacture the false optic that it does not know or suspect the rampant and on-going advertising on ebay.com of fake products that infringe on the trademarks’ of legitimate rights holders, such as Plaintiff.

“We believe that we have overwhelming evidence demonstrating that eBay has engaged in a sustained pattern of racketeering.” Among the many complaints, the lawsuit alleges eBay developed and maintains a pervasive practice of obstructing and ignoring counterfeit enforcement through sham customer support programs. eBay purports to police such counterfeiting through its policy which states “You can’t list replicas, fakes, counterfeits, or other illegal copies on eBay.” However, test purchases have proven this is simply lip service offered to address a known, extensive and ongoing problem. “Reality is starkly different,” said Parris.

“The lawsuit alleges eBay often took no effective action to block and remove listings and sellers when fake and counterfeit products were actually purchased, confirmed by the manufacturer, and reported to eBay. Incredibly, even products bearing a manufacturer’s trademarked brand that never existed in the manufacturer’s product line continue to be sold on eBay and deceive consumers, despite repeated complaints,” stated Parris

According to the complaint, “Plaintiffs are informed and believe that even more shocking is that consumers actually receive email notifications and eBay webpage from eBay encouraging the purchase of known counterfeit and fake products. When confronted on the counterfeit purchases, eBay directs consumers to mail counterfeits back to the seller as a mandatory condition for a refund. Returned counterfeits are easily recycled, re-listed and re-sold to unsuspecting consumers, and the buyer loses their only evidence of receiving a counterfeit,” said Parris.

“The fundamental goal of the lawsuit is to bring attention and monetary consequence to eBay to divest itself of any interest or activity, direct or indirect in the distribution of counterfeit or potentially counterfeit products,” added Parris.

“RICO involves an intentional and repeated pattern and practice of violating laws in furtherance of a criminal enterprise. Manufacturers injured by RICO activities in business or property by reason of a violation of Section 1962 are entitled to recover threefold the damages sustained and the cost of the suit. A significant number of the eBay consumer community may be entitled to refunds for counterfeit products purchased on eBay.

A copy of the complaint can be downloaded here.

A photo accompanying this release shows confirmed counterfeit Chanel No. 5 EDP, SanDisk 64GB micro SDHC memory card, Lunatik Epik Apple iWatch Case and TakTik Extreme iPhone case, Monster Tron T1 headphones, and a Group-A Autosports lower automobile suspension control arm. The photo can be downloaded here.

About The R. Rex Parris Law Firm

For 30 years, R. Rex Parris has devoted his practice to protecting the rights of injured people and aggrieved employees. Rex and his dedicated team provide thorough, high-quality representation with integrity and compassion. From motor vehicle crashes to class actions and defective products, these lawyers fight aggressively against corporate defense attorneys and insurance companies to ensure their clients get the compensation they deserve. For more information please visit rrexparris.com