Ebay takes on big brands

18 September 2009

BRUSSELS: Online auction website Ebay has presented EU commissioners with a 750,000-plus online petition opposing what it calls "unfair limitations" on the sale and resale of premium products on the internet.

The petition marks the climax to a long-running feud with some of the world's most famous luxury brands, including Chanel, LVMH and Tiffany, who complain that the €220bn ($323bn; £196bn) luxury goods market is being devalued by internet auction sites.

Bricks and mortar marketers and online retailers are currently in deadlock over proposed new rules governing how goods can be distributed and sold to consumers throughout the European Union.

Brand owners claim that online retailers are “free riding” on their image-building investments and are jeopardising the jobs of thousands of people.

They also argue that the “sales experience” is essential to maintaining the image of luxury goods.  

While Ebay accepts that brand owners “should be able to determine within limits how their products are initially sold,” its toughly-worded petition takes a different tack.

“We believe strongly that they should not be allowed to impose blanket bans on internet selling, and any other restrictions on trade must be based on objective and publicly available criteria which are of proven benefit to consumers,” it says. 

The petition includes more than 250,000 signatures from consumers in the UK, around 200,000 from Germany, and in excess of 100,000 from France. In all, Ebay has some 88m active users on an annual basis.

The fierce lobbying has been triggered by a prolonged consultation period over proposed changes to the terms of so-called “vertical agreements” between manufacturers and distributors, which are exempt from normal competition rules.

EU officials have proposed a long list of amendments designed to take account of the growth in retail buying power and the development of the online market, but many brand owners are concerned at 'woolly' language in some draft amendments.

The consultation ends on September 28.

Data sourced from Financial Times; additional content by WARC staff