eBay Sellers File Antitrust Lawsuit over Feedback Policy
By Ina Steiner
Several sellers filed an antitrust lawsuit against eBay last week over its Detailed Seller Ratings (DSR) feedback policy instituted in 2008. The lawsuit alleges that eBay's DSR policy restrains competition between sellers within the online auctions market to the financial benefit of eBay, and it says the policy "undermines the ability of small auction sellers to compete with larger sellers."
The complaints in last week's lawsuit echo those leveled against eBay in public forums ever since it introduced the new system. The lawsuit alleges eBay's DSR policy hurts small sellers, and other claims include the following:
- eBay's the five-star rating system is "misleading," since buyers view a rating of three as average and a rating of four as good, but eBay requires sellers to maintain a DSR average of 4.3 to freely operate on eBay;
- eBay's DSR policy allows malicious competitors to artificially lower an individual seller's DSR ratings anonymously;
- The DSR policy leaves sellers vulnerable to feedback extortion, since just a few negative DSR ratings can destroy a seller's goodwill and impose severe limitations on the seller's account, allowing unscrupulous buyers to force sellers to provide items and services "over and above what they have paid for."
- Rehabilitating DSR ratings is almost impossible;
- The categories utilized in the DSR ratings are prejudicial to small sellers.
"Defendant eBay's DSR Policy is destroying the business and livelihood of many well established, small eBay auction sellers," according to the lawsuit. A link to the full complaint is found on the AuctionBytes Blog, and a description and background of the plaintiffs suing eBay are found in this AuctionBytes news article.
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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