Dive Brief:
- Continuing its acquisitions spree, eBay announced Monday it has purchased 3PM Shield, a company that provides AI-based marketplace compliance solutions, for an undisclosed sum, according to a press release. The two companies closed the transaction on Thursday.
- 3PM Shield’s technology will allow eBay to better spot suspicious or harmful sellers on its platform as well as fraudulent, illegal or otherwise unsafe items, the company said.
- EBay hopes the use of 3PM Shield’s technology will help it maintain trust among its merchants and customers.
Dive Insight:
After laying off workers earlier this month, eBay is continuing to pour money into acquisitions. Last June, the e-commerce behemoth acquired KnownOrigin, a platform for selling non-fungible tokens, for an undisclosed sum. Two months later, the company announced plans to buy TCGplayer, a technology platform for collectibles, for about $295 million.
News of the 3PM Shield acquisition follows an SEC filing last week disclosing that eBay planned to lay off 500 workers to improve its corporate structure and invest in new technologies.
Like other marketplaces, eBay has battled counterfeit goods sold online for years. In recent years, the company introduced initiatives to authenticate watches, shoes and sports memorabilia. The 3PM Shield deal will allow eBay to bring more fraud-fighting tools in-house.
“It is a top priority to help ensure that eBay remains a safe and trusted environment for our global community of sellers and buyers, particularly to prevent counterfeits and unsafe or illegal products,” Zhi Zhou, chief risk officer at eBay, said in a statement. “3PM Shield has been a valued and effective external partner in helping eBay tackle these challenges and we look forward to unlocking additional capabilities as we bring their technologies in-house.”
Fraudulent items sold on eBay and other e-commerce platforms could hurt companies’ bottom lines and reputations. A 2020 survey from Red Points found that over half of the survey respondents would request a refund if they bought fake goods, and nearly half said they would also write warning reviews about the sellers who sold them the fraudulent item.
Federal lawmakers are also weighing measures to crack down on counterfeit sales. Senators are considering the INFORM Consumers Act, which would require online marketplaces to obtain, verify and share information about large third-party online sellers. Though the bill has been supported by the National Retail Federation and other trade organizations, Amazon initially spoke out against it because of its focus on e-commerce marketplaces.
Marketplaces have attempted to battle counterfeits on their own as well. Amazon developed a counterfeit crimes unit in 2020 comprised of former federal prosecutors, investigators and data analysts to fight fraudulent item sales on its platform. But brands still report challenges with the platform: Adore Me, the DTC intimates brand, says Amazon’s efforts have been insufficient in resolving the counterfeits of its products on the marketplace.
