Nike ramps up legal battle within online sneaker seller StockX
Yahoo Finance Live’s Akiko Fujita and Brian Cheung break down footwear manufacturer Nike’s legal battle with online sneaker reseller StockX.
Video transcript
BRIAN CHEUNG: For right now, I want to talk about the world's biggest sports brand. It's apparently stepping up its battle against StockX. Nike claiming in a court filing that it was able to purchase four pairs of fake Nike kicks from the online shoe seller, despite it coming in a box that says the footwear is, quote, "100% authentic." And now Nike wants to add counterfeiting claims to an already existing lawsuit that was filed back in February. Yahoo Finance reached out to StockX, hasn't heard back yet.
Akiko, you know that this is a topic that I love dearly. I have purchased things on StockX before. What's interesting is kind of two things about this story. First of all, apparently, there is a legal department at Nike that's just buying things on the secondhand platforms to see if they can find and fish out any sort of counterfeits. But then secondly, really how accurate it is for these reselling platforms, which have gotten massive to actually check and make sure that the pair of Travis Scott 1's are actually true Travis Scott 1's, as opposed to counterfeits from somewhere.
AKIKO FUJITA: Well, I mean, we were talking about this in the break, how challenging it is for these platforms to be able to verify. I mean, I'm not sure it's that challenging to verify Nike specifically, right? But these are kind of claims that we've heard from those like Amazon before, who say, you know, that Amazon isn't doing enough to verify the authenticity of what's on their platform. And the argument has always been, well, we're just a platform that allows for sellers to come on board. And it sounds like StockX is sort of the same.
BRIAN CHEUNG: Yeah, and I think that it's going to be-- I mean, this is just a lawsuit. These are allegations, right? Now if it is, indeed, the case that these were counterfeits, then StockX might say, well, look, when it comes to our vetting process, we're doing what we can, but, you know, counterfeits sometimes might bleed through. It could be a user error. This is not nefariously StockX trying to push counterfeit goods onto people, knowing that they can make a profit. And I will say, on the point of counterfeits broadly in the shoe space, they have gotten very good over time. I--
AKIKO FUJITA: With the counterfeits.
BRIAN CHEUNG: With the counterfeits themselves, which, again, that's not StockX's responsibility to stop the supply of counterfeit goods that are coming from wherever, but you can look on online forums. A pair of sneakers that are, let's say, for example, Air Jordan 1s, the subtleties to defining what is counterfeit versus a real one is as small as the distance between the two eye holes on the top of the shoe, if it's one or if it's two centimeters. Then that's the difference between fake and real. I mean, it is very, very good. And especially if the volume is high on these marketplaces, the people that are vetting the authenticity, it's not like they have 30 minutes per pair of shoes to look at these things.
AKIKO FUJITA: Well, I mean, I would argue just overall with brand names, it's become harder and harder to differentiate between what's authentic and what's not. If you're talking about, sort of, if there's such a thing as the high end of the counterfeit market, those who are really-- branding bags, right? I mean, if you think about the quality of where they are compared to where they were even 10 years ago, it's definitely different. But isn't part of the argument here also that StockX had come out and said that they're going to go out of their way to verify the authenticity of these shoes, right, with the hashtag. This had a verification on it, and yet, it was still fake.
BRIAN CHEUNG: Well, and--
AKIKO FUJITA: That's at least what Nike is alleging.
BRIAN CHEUNG: And the concern here-- I mean, that's really what, I guess, the crux of this lawsuit is getting at, whether or not there was false advertising, as opposed to, let's say, fraud in pushing things that are not 100% authentic. That might be a massive part of this, too. I'm no lawyer, but you know, I think at the end of the day, it's just that if you're going to advertise 100%, well, if you have not even four, one pair of sneakers that comes through that isn't authentic, well, then you've essentially lied to the people on your platform.
AKIKO FUJITA: How many shoes do you think they had to buy--
BRIAN CHEUNG: To get to four?
AKIKO FUJITA: --to get to the four? I mean, that's it, right? That's sort of it, right? I mean, any counterfeit is bad, but just what percentage of the shoes that are being sold are counterfeit?
BRIAN CHEUNG: I mean, I think if it's four out of eight, then that would be pretty high. If it's four out of 100, then it's like Russell Westbrook shooting numbers. Then that's a whole--
AKIKO FUJITA: Oh, the dig again. I don't know if people get that joke, inside joke.
BRIAN CHEUNG: All right, we'll leave it there.
