EcommerceBytes-NewsFlash, Number 2876 - August 23, 2012     1 of 6

eBay Prohibits Class Action Lawsuits in Updated User Agreement

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eBay has faced its share of class action lawsuits, but it's now trying to prohibit its users from filing such lawsuits. eBay updated its User Agreement and Privacy Policy, which are effective immediately for new users and take effect on October 10, 2012 for current users. And in the new agreement that users must adhere to in order to continue using the site, eBay requires them to submit to arbitration and only allows users to pursue claims and seek relief on an individual basis.

In a post on the eBay Announcement board, eBay outlined the key updates to the eBay User Agreement, including provisions relating to eBay's contacts with its members; cross border trade and fees; as well as updates to the Limitations of Liability Section.

eBay also updated provisions governing how disputes between eBay and its users are resolved.

The User Agreement contains an Agreement to Arbitrate, which will, with limited exception, require you and eBay to submit claims to binding and final arbitration, unless you opt-out of the Agreement to Arbitrate by the deadline stated in the User Agreement. Unless you opt-out: (1) you will only be permitted to pursue claims against eBay on an individual basis, not as part of any class or representative action or proceeding and (2) you will only be permitted to seek relief (including monetary, injunctive, and declaratory relief) on an individual basis.

The laws of the state of Utah will govern the User Agreement and any claim or dispute between you and eBay, unless otherwise stated in the User Agreement. If you opt-out of the Agreement to Arbitrate or it is found not to apply to you or a particular claim or dispute, any claim between you and eBay must be resolved exclusively by a state or federal court located in Salt Lake County, Utah.

An eBay seller reacting to the changes wrote, "We sellers are "agreeing" to not participate in a class action lawsuit against eBay and any legal claims (They say) must be presented in a Utah court. This cannot be legal! To continue to use eBay we have to agree to this?!"

Other sellers wondered why eBay the laws of Utah governed the User Agreement, given that eBay is based in California and was incorporated in Delaware.

Another seller wrote, "Oh, this is the funny part: "You don't need to take any further action to accept the updated eBay User Agreement. If you choose not to accept the new terms, visit this help page for further direction." If you click on the "help page," it takes you to How to Close Your Ebay Account."

eBay also made key updates to its Privacy Policy, including updated provisions regarding how you can choose to interact and share your social media accounts with eBay; new links in the Privacy Policy to the eBay Privacy Center; updated provisions describing eBay's collection and use of users' personal information; and updated provisions concerning eBay's protection and retention of users' personal information.

In the post, Senior Counsel Braden Dong and Privacy Counsel Marcus Morissette wrote, "We encourage you to review the updated User Agreement and Privacy Policy to familiarize yourself with the updates."

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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

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