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EBay Steps Up Authentication Efforts with Certilogo Acquisition

eBay is seeking to give shoppers greater peace of mind—and ensure legislative compliance with counterfeit laws—through the acquisition of a new AI-powered authentication tool.

The web marketplace on Wednesday announced that it had purchased Certilogo, a digital platform for managing a garment’s lifecycle. The group works with brands to tag products with virtual IDs, or “product passports” that enable traceability and protection against counterfeits. According to eBay, the move solidifies its status as a trusted destination for shopping secondhand or pre-owned fashion, giving consumers the confidence to bid on and buy items from third-party sellers on the site.

“For many years, consumers have turned to eBay as a trusted destination for buying and selling pre-loved apparel and fashion goods, not only because of the unmatched selection, but because of our commitment to utilizing the latest technology to empower our sellers and buyers,” eBay vice president Charis Marquez said. “Certilogo’s technology and talented team allows eBay to build on this commitment, establishing eBay as a leader in pre-loved fashion, and offering new ways for consumers to connect and engage with brands.”

Certilogo founder and CEO Michele Casucci said that the startup is a pioneer in the creation of digitally “connected products” and “consumer-facing digital authentication.”

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“Certilogo was created to build connections between consumers and brands, utilizing technology to simplify and strengthen those relationships and unlock information that fundamentally changes how we interact with apparel and accessories,” she explained. By joining forces with eBay, a market leader in re-commerce, “we will be able to make an immediate and significant contribution, taking advantage of already consolidated skills and infrastructures, promoting a model that has its foundation in community and circularity.”

eBay signed a definitive agreement to acquire the company as of May 15, and the closing of the transaction is subject to satisfaction of regulatory approvals expected to take place in the third quarter. The groups did not reveal the details of the transaction.

Founded in 1995 at the height of Silicon Valley’s first-wave tech boom, eBay launched first as an auction site, growing into the world’s largest online marketplace for peer-to-peer sales in the ensuing years, after which its No. 1 status was usurped by Amazon. The company operates in 190 markets globally and enabled $74 billion of gross merchandise volume in 2022.

In recent seasons, web-based resale has experienced a fresh wave of interest from young shoppers whose appetites for secondhand goods are growing at a tremendous pace. ThredUp’s annual Resale Report showed that the global pre-owned apparel market is set to double by 2027 to $351 billion—9 times the growth of the broader retail sector. Shoppers are leaning into circularity, and the stigma surrounding buying secondhand has all but dissipated, but concerns about counterfeits may represent the largest remaining thorn in the resale market’s side.

The global market trading in fake goods is worth a staggering $4.5 trillion, with faux luxury merchandise accounting for up to 70 percent ($1.2 trillion), according to a 2019 Harvard Business Report. During the first two weeks of this month, U.S. Customs and Border Protection (CBP) officers stopped and seized more than $3.1 million in counterfeit goods including Rolex, Van Cleef & Arpels, Louis Vuitton and Chanel forgeries at borders across the country.

Washington has stepped up to fend off the tsunami of dupes. Congress passed the INFORM Consumers Act in December, which modernizes consumer protection laws and requires web marketplaces to collect and verify basic business information from sellers before they are permitted to sell online. A companion bill, the SHOP SAFE Act, incentivizes platforms like eBay to follow best practices for screening and vetting vendors and the products they put up for sale, and forces them to address repeat counterfeit sellers.

Marketplaces are attempting to head off the issue by implementing their own safeguards. Last month, eBay launched a “Certified by Brand” program that gives brands and their authorized sellers the ability to mark their products with “direct from brand” or “brand authorized seller” badges. Two years ago, the company purchased Sneaker Con’s authentication business for new and pre-owned collectible footwear, and launched an Authenticity Guarantee program for luxury watches and handbags. Competitor Amazon has also ramped up its efforts to stop fakes from making their way into the hands of its users, saying it prevented over 2.5 million attempts to create fraudulent selling accounts in 2021 alone, and seized and disposed of more than 3 million counterfeit products that year. The company in April announced an industry-wide collaboration dubbed the Anti-Counterfeiting Exchange, which will allow Amazon sellers to share details about alleged counterfeiters also doing business on the site.