As advocates for choice, competition and innovation on the Net, we’re troubled to read about a ludicrous court ruling against online commerce. The French Tribunal de Commerce in Paris ordered eBay to pay 39 million Euros to French luxury goods maker LVMH. Mike Masnick of Techdirt shares our outrage here.

Judging by media coverage of this ruling, one would think it’s all about preventing sales of counterfeit goods. But it’s actually much farther-reaching than that, in a way that’s incredibly damaging to the growth of e-commerce, small business and consumer choice in Europe. The French Court ruled that eBay must halt the sale of legitimate, genuine LVMH perfumes on the eBay site. Essentially, the Court held that a big business like LVMH could stop customers and owners of its products from re-selling them to someone else. This is blatant discrimination by French authorities against the e-commerce channel. eBay is appealing the ruling (read their take on the ruling on their company blog, eBay Ink). The outcome of this appeal could impact the future of e-commerce around the world.

Imagine if efficient online marketplaces like eBay, Overstock, Amazon and others had to pull the plug on entire categories of items, preventing perfectly legal sales of authentic items. Millions of shoppers use these sites to find great deals on things they want or need. During tough economic times, many people look to the web to help stretch a household budget. And millions of people around the world use the web as a tool for running their small businesses. And if you think that this is just another example of “France being France,” think again. This backward, anti-competitive perspective may be coming to a court near you. Any day now, the Federal District Court in New York will rule on Tiffany’s lawsuit against eBay. Again, Tiffany is crying counterfeits, and trotting out dubious data on online sales. But we believe Tiffany’s real interest here is to shut down any distribution of Tiffany products that isn’t completely controlled by Tiffany. Got a gift of earrings that just aren’t your style? If the New York court rules the wrong way, you may no longer have the option of selling them online.

Of course, counterfeits are a scourge to any marketplace. They undermine brand integrity and cheat buyers. And counterfeits have been a problem long before the Internet existed. eBay and others have worked hard to stem the sale of fake items. But go to any urban sidewalk, bazaar or back alley, and you’ll likely find the counterfeit trade still thriving. So when manufacturers and retailers cry “counterfeit” and point fingers at the e-commerce channel, their true motives are exposed. They’re calling for competition prevention—not consumer protection. And when courts agree with them, we all lose.

Steve DelBianco is executive director of NetChoice.

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There’s no denying that the main objective for any e-commerce sales or retail marketing executive is to maximize the total value of visitor traffic on their site, simply put— turning web browsers into buyers and clicks into cash. Search is certainly leveling the playing field as well, so how do companies stand out from the crowd? And why are some sites still failing to deliver compelling and relevant content to their customer base?

In today’s saturated marketplace, retailers can no longer rely on the traditional marketing techniques and media vehicles to manage customer interaction and drive home sales. In order to achieve greater web interaction optimization, e-commerce and retail sites must recognize the inherent value of social behavioral merchandising and effectively increase the relevance of communications by automatically promoting the most relevant products to each visitor, thereby maximizing conversion rates and average order values.

By making websites more customer-centric via these “recommendation engines,” retailers can essentially optimize customer interaction through improved content and messaging based on a customer’s specific needs and behavioral patterns.

We all know who Amazon.com is. Besides the millions of SKUs at Amazon.com, the site is easy to use and “steers” browsers in the right direction when they need help (recommendations, user reviews, etc.). The addition of recommendations from other customers can build a sense of trust and community between new and returning customers—and probably better than any 17-year old working the floor at Border’s Books.

Given the wide variety of tools available in the market, online retailers must familiarize themselves with the different points of customer contact and approaches towards reaching interaction optimization. The Customer Interaction Cycle, shown below, depicts the many different points—from initial landing page through transaction—where collective intelligence can be applied to maximize value.

Rolf Elmer is CEO of Avail Intelligence

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Pat- Thank you for your post. We at Quova enjoyed reading it and were glad to see that you appreciated the spirit behind our Valentine’s Day package. While the gift was clearly the attention-grabber, we did have a serious intent—to demonstrate the very real threat of card not present fraud, a critical security issue for online retailers. After all, online fraudsters worldwide weren’t joking around when they unlawfully carried off $3.1 billion in goods from e-commerce sites in 2006.

But there was another clue in our mailer as well. Pinpointing the physical origination point of an order on the Internet and comparing it to the bill-to and ship-to address is one of the most effective tools in combating online fraud.

Many online retailers already use some type of fraud risk scoring method. They may look at whether the buyer is a new or repeat customer, the nature of the purchase, especially a very expensive one, the type of shipping request, credit card security codes and more. But one item frequently overlooked is reviewing a customer’s location when they place an order online. By adding just this one step of comparing the customer’s billing address to his IP address location to the transaction, one Quova e-commerce customer was able to detect an additional 70 percent of his online fraud.

Think about it—nearly every business decision is affected by geography: language, currency, shipping, taxes, licenses, government regulations and more. When a customer walks into a brick-and-mortar store you can tell a number of things about them right away: age, gender, what they’re shopping for, whether they’re return customers. But when a customer visits your retail website, you know exactly none of these things…where they are, what they want, what brought them in, or how likely they are to be crooks. It’s an anonymous process. Knowing the geographic location of your web visitor can provide the same sort of data for an online transaction. So the fact that Tom isn’t actually based in your office was an indicator that something may have been amiss with the package.

Quova does this with a technology called IP Geolocation, which can tell you where your online customers are and how they connect to the Internet as soon as they visit your site (through their IP address). There’s no need to ask for further information or store cookies in their browsers. The service is offered on a subscription model and is easily deployed with an API to your web application.

So while we see we sparked some humorous discussion around your office last Thursday, we also hope that we spark some more meaningful discussion among your readers about the best practices in geolocation technology, and the role it can play as part of a comprehensive online fraud prevention strategy for retailers.

Kerry Langstaff is vice president of marketing for Quova, Inc.

Do you think Quova’s marketing tactic was successful?

As multichannel retailers, how do you help secure your customer’s data?

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