Tracking Bogus Brands Online

Manufacturers say online auction sites are perfect for selling counterfeit goods. Microsoft, Pfizer, and others are cracking down. By Polly Sprenger.

An eBay auction of so-called herbal Viagra was abruptly halted Tuesday after Pfizer got wind of the sale. Such counterfeit products are finding a market on Internet auction sites, and Pfizer, which makes Viagra, is just one manufacturer preparing to crack down.

A member of Pfizer's legal department said the company is seriously concerned about the problem of online counterfeit sales, and the drug company has contacted the International Anti-Counterfeiting Coalition, or IACC, in Washington for help in addressing the issue.

"Consumers have no way of knowing if the sale is authorized by the legitimate manufacturer," said IACC managing director George Abbott. "Consumers can't make an informed decision."

The IACC hasn't made a recommendation as to who is liable in the eBay case, but Abbott said the coalition is very concerned about a new distribution channel for counterfeit goods.

The online sale of counterfeits is an increasingly insidious problem for manufacturers. The sites are primarily policed by their buyers, who may or may not report the sale of a counterfeit product.

Sellers have more anonymity online than they do at a flea market or swap meet, making it harder for manufacturers to track down the origin of the goods.

Pfizer has an employee who surfs auction sites in search of offending products, such as herbal Viagra. The company maintains that use of the drug name is a case of copyright infringement. Pfizer's legal team has issued cease-and-desist orders against offending sellers.

One eBay buyer taken in by a fake item said the online auction house itself has hired a private investigator, and the company confirmed that it often uses third-party assistance in resolving fraud and counterfeit claims. EBay (EBAY) declined to comment on the number of counterfeit goods traded on its site.

Although some auction sites, like uBid, only offer goods the company has bought and approved, eBay, Yahoo Auctions, and AuctionUniverse allow anyone to list an item for sale.

Brad Handler, eBay's director of law and public policy, said, "EBay is not an auction. EBay is a person-to-person trading community. As such, individual users are legally responsible for their listings."