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Wed Dec 22 2010 21:44:05

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

By: Ina Steiner

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Does eBay give large merchants slack when it comes to low feedback ratings from buyers, while holding smaller sellers accountable when they receive low ratings? That's a question that may be answered in court if a new lawsuit against eBay goes to trial.

Five sellers filed an antitrust lawsuit against eBay last week claiming their sales suffered due to eBay's Detailed Seller Ratings (DSR) policy instituted in 2008. They claim the policy undermines the ability of small auction sellers to compete with larger sellers, stating, "Defendant eBay's DSR Policy is destroying the business and livelihood of many well established, small eBay auction sellers."

In addition to alleging that eBay violates antitrust laws, plaintiffs are suing eBay for violating California's Unfair Competition, Tortious Interference and Trade Libel laws, as well as for unjust enrichment and negligence. (Thursday's AuctionBytes Newsflash contains articles describing the lawsuit and summarizing each seller's alleged experiences with eBay.)

Note that eBay previously won an antitrust skirmish in Malone v eBay, giving plaintiffs' attorneys a lesson on how eBay will argue why it is not subject to antitrust litigation.

Last week's lawsuit alleges that large eBay sellers are often exempt from DSR penalties that small sellers are subject to, and/or have a much greater chance of rehabilitating their DSR ratings due to the volume of the transactions they conduct.

Most people outside the industry probably don't understand the extent to which eBay has shifted its strategy away from its founder's commitment of maintaining a level playing field for all sellers. In the last year in particular eBay has done deals with large merchants and brands, driving traffic to specific merchants and granting them special deals. This week's revelation that eBay was driving visitors to Best Buy listings on eBay where they could purchase items and pick them up at their local Best Buy retail stores is just one example of eBay's exclusive partnerships with large merchants.

eBay sellers and AuctionBytes readers have claimed that eBay favors large-merchant listings in its Best Match search algorithm and is not requiring large merchants to maintain the same level of feedback ratings as smaller sellers.

If the Garon et al versus eBay case makes it to a courtroom, we could learn whether those claims are true or not.

Link to Garon et al v eBay lawsuit

Link to AuctionBytes article "eBay Sellers File Lawsuit over Feedback Policy"

Link to AuctionBytes article "The Sellers Behind eBay's Antitrust Lawsuit"





Comments (125) | Permalink

Readers Comments

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: Ky

Wed Dec 22 22:25:26 2010

Frankly,

I am doing barely OK with the new DSR but how can we all sign and support this lawsuit?

I have to say that, buyer has way...way too much and absolute power without balance and they know how to get FREE things from seller now.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

This user has validated their user name. by: Pete

Wed Dec 22 22:32:01 2010

ABOUT TIME ...eBay have destroyed so many small and medium sellers with this totally unfair system

I have 1 account locked from selling over 5 weeks now , with 100% FB all DSR 4.9's NO disputes no negs/neutral or claims ever...the reason something called BBE ????
how is it possible on 100% FB and no negs etc

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: Another Wronged Seller This user has validated their user name.

Wed Dec 22 22:33:10 2010

About time somebody took a stand!

We all know how slanted and unfair the ''new ebay'' is.

The lawsuit seems to be right on target with all the major points.

My gut has a good feeling about this!

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: Patricia This user has validated their user name.

Wed Dec 22 22:39:26 2010

Whenever I see something like this I hope...and hope that some judge will see thru Ebay's attorney's attempts to cover up what is really going on.  Just once I'd like to see a Judge with good common sense that can grasp and understand what this company is and has been doing to small sellers all along!  I want them hit in the only place that counts with them....their wallet!!!

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: GazLanNaThai This user has validated their user name.

Wed Dec 22 23:12:18 2010

I agree with Ky - Ina, please contact the plaintiff's attorneys and post details of how all those of us damaged, bankrupted, or closed down by eBay can submit supporting case studies for them to increase the weight and variety of evidence that they have available.

If they need to raise a fighting fund to counter eBay's 3rd-world-national-economy level of war chest. please start some way for us all to contribute whatever we can afford - but NOT through PayPal.

I really hope this one can go the distance with no "out of court" settlement that results in no legal judgement against eBay.  I'm also willing to support in any way I am able, despite being 12,000 miles west of California.  I hope many others are willing to do so too.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: sparky

Wed Dec 22 23:33:52 2010

Buyers think this is a 'survey' type evaluation.  I was TSR for a long time. Then as of the intro of the DSR system, revenue dropped 50% and has barely maintained that. Absolutely cheer these people filing the lawsuit!

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

This user has validated their user name. by: permacrisis

Wed Dec 22 23:36:56 2010

"Most people outside the industry probably don't understand the extent to which eBay has shifted its strategy away its founder's commitment of maintaining a level playing field for all sellers."

That's because Pierre allowed it to become 'an industry'.

He should have policed it to keep it strictly person-to-person.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: Ron

Wed Dec 22 23:40:49 2010

I just read the whole complaint and certainly it appears that the complainants were treated in a heavy handed and unreasonable way.

I hope that they are successful, but I just wonder whether eBay will get a pass simply due to a judge being unable to truly comprehend the situation.  I can see how a corporation can argue that they have a right to conduct business as they see fit, without obligation to necessarily service any particular customer that they wish not to deal with.  I think that the key for the defendants will have to do with eBay's unique position and the monopoly power that they hold. But whether this straitjackets eBay in the eyes of the law, we'll have to wait and see.

And although the DSR system hurt this set of complainants, personally I think that much greater harm has been caused to the general population of auction sellers by Best Match and the flooding of the site with fixed priced item at reduced listing fees.  This has caused most businesses that use the auction format to lose sales by 50%-75% - not a suspension or closing of their account, but rather a slow death through deliberate manipulation by eBay.  Personally, I think that many more sellers of the auction variety have left voluntarily due to the poor business conditions on eBay than have been suspended or kicked off.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: Patricia This user has validated their user name.

Wed Dec 22 23:48:55 2010

1)  Ebay normally charges a listing fee.  Their service is not free - nor is it normally pay only when you sell.  I do believe there is merit to the fact that Ebay seems to manipulate traffic to the larger sellers at the expense of the smaller ones - thereby cheating the sellers out of their listing fees.  If they can prove that and make a judge understand that...then I see that point as valid.

2)  The blatant fact that Ebay tells buyers that rating a seller 4 stars is good....then punishes sellers for anything less then 4.3 is another very valid point.  I think this will all hinge on the attorneys explaining and clarifying for the judge more than anything else.  Understanding Ebay is not a simple task for anyone who hasn't bought and sold on the site.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

This user has validated their user name. by: Pete

Wed Dec 22 23:49:11 2010

I think that many more sellers of the auction variety have left voluntarily due to the poor business conditions on eBay than have been suspended or kicked off.  

That is of no importance they left of their own accord...not kicked off due to a skewed rating system allowing anonymous buyers to be vindictive or plain stupid

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: Rick1313

Thu Dec 23 00:24:01 2010

I am repeating myself but it bears repeating (at least to me).

Interesting times are ahead for eBay,inc. on the legal front in the next couple of years as the bad faith/fraudulent changes made under Mr. Donahoe (since 2008) are now coming to bear.

Companies like eBay,inc. have settlements calculated (kind of actuarial based) when making budgets and/or calculations of future long range expenses. This, in turn, is charged back with the fees they charge (whether sellers, advertisers, etc.) for use of their services (probably one of the reasons for the massive fees increase that eBay,inc did early this year).

Investors and Wall Street know this is part of the way it works in the corporate world.

The problem that may arise is if TOO many settlements may be looming on the horizon, that were not anticipated when making futures calculations.

Investors and Wall Street would not like to see that happening.

More lawsuits will be forthcoming.

The Buyer Protection Program, Accepted Payments Policy, secretive buyers' opinions (DSR's) that eBay,inc. uses as statistical facts against paying users of their services are just some of the areas that they are wide-open and vulnerable.

--------------

I like the one about the libelous statement that eBay,inc. set out to one of the plaintiff's (and spouse) buyers that the seller was a threat to the security of the eBay environment.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: jmho

Thu Dec 23 00:35:48 2010

There is more than one court involved, the other being the court of public opinion.

I suggest people start documenting everything they can with screen capture and/or recording software and post the images and videos to every possible venue. Have different people duplicate the efforts and link to each other so as to corroborate the results. The body of public evidence will be so large as to not be deniable.
Everyone (except ebay and paypal) can win, even if only vicariously.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: David

Thu Dec 23 01:52:06 2010

The lawsuit is frivolous. First of all the 4.3 was replaced by the number of 1's and 2's

70% of all DSR's left are 5's. There aren't any sellers that have 4.3's that have all 4's and a couple of 5's. If you have a 4.3 you've got lots of 1's and 2's.

Second of all, when you sign up for eBay the user agreement clearly states that they can suspend you for any reason.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

This user has validated their user name. by: Philip Cohen
Web Site

Thu Dec 23 03:44:37 2010

Don’t forget though that eBay is an “equal opportunity” fraudster; they will defraud, or aid and abet the defrauding of, both sellers and buyers.

In that respect it can be clearly demonstrated, to any intelligent person, that eBay is knowingly aiding and abetting those many unscrupulous professional sellers to commit rampant shill bidding "wire fraud" on unsuspecting buyers.

eBay/PayPal/Donahoe: Dead Men Walking.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

This user has validated their user name. by: Philip Cohen

Thu Dec 23 03:58:56 2010

And don't forget that it can be clearly demonstrated that eBay is knowingly aiding and abetting the many unscrupulous professional sellers to commit shill bidding "wire fraud" on unsuspecting buyers.

Remember, eBay is an equal opportunity cheat; they will defraud or aid and abett the defrauding of both sellers and buyers.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: Rich

Thu Dec 23 04:19:04 2010

David says 70% of the dsr's left are 5's. How does David know a stat like that? If David's accurate with this stat; then David is most likely an Ebay employee who knows quite a bit.  Most likely Ebay will win the suit; mainly because the dsr's are anonymous so it'll be impossible to prove whether ebay cheats for large sellers. That's why ebay made this anonymous, it allows ebay to keep the sellers they want and remove the sellers they don't want.  I doubt the plaintiffs can find legal proof, but what they can do is get huge numbers of sellers to sign on to their claims maybe. None of this is good for ebay. The general public has to notice that Ebay fights with sellers while Amazon works with sellers.  Is this good for Ebay? Ebay probably wins but what David and Ebay continue to not understand; is that any rule or site change that is so incredibly unpopular with sellers as the DSR dashboard; will eventually carry over and begin to negatively affect the buyers.  In turn growth gets stunted and buyers enjoyment worsens.   Do buyers like buying on ebay and then receiving e-mails and notes with the package that beg for 5's?  Is this good for the buying experience, David?  Is this normal or fun?  Or is this neurotic and a drag?  Anyone ever get a package from Amazon that begged for 5's?  Do buyers like leaving a 5 and three 4's and then getting an e-mail from the seller who tells them they are now blocked?   That's what happened to my niece and she cried. So maybe ebay wins this lawsuit; but does Ebay upper management have any idea yet that the seller dashboard has not only driven away sellers, but also driven away buyers?

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: forkoff

Thu Dec 23 04:27:47 2010

"Second of all, when you sign up for eBay the user agreement clearly states that they can suspend you for any reason."
david sounds like an ebay shill
that statement is typical of their attitude
"if you dont like it F*** OFF"

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: Roseleen

Thu Dec 23 05:23:24 2010

Having read the original article I felt rather glad that at lastsomeone was taking a stand on behalf of the small guys.
Then I looked at the list of related articles on the right hand side... all cort cases against ebay and vitually all overturned under appeal in ebay's favour...

Sadly I think that the instigator's are throwing good money after bad.

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: WatchingtheWheels

Thu Dec 23 06:46:53 2010

I've been involved with venue selling for a little past 2 years.

Every single venue has Terms of Use contracts that are far worse than anything ever dreamt up by the banks regarding credit cards and the double talk presented when evaluating a mutual fund.

I believe that it is going to take Government intervention of some sort in order to get these borderline fraudulent businesses to stop scamming their seller bases.

I have yet to find any venue's TOU that presents anywhere near a contract that has any level of ethical standards applied and offered to what essentially represents risk free inventory, by which venues ''?earn?'' their monies.

IF these types of tactics were applied within a personal relationship type of setting, the person offering these types of agreements could be charged with fraud and would be found guilty.

I believe that venue sellers need to explore the possibility to challenge the very validity of venue contracts. They ALL are essentially ''NO WIN SCENARIO PRESENTATIONS'' foisted upon an unsuspecting public.

IF the stock market and credit card agreements can be ammended, why can't venue agreements have similar anti fraud measures taken?

Lawsuit Claims Large Merchants Immune from eBay Feedback Policy   Lawsuit Claims Large Merchants Immune from eBay Feedback Policy

by: Sue This user has validated their user name.

Thu Dec 23 08:47:52 2010

I still haven't been able to understand how something that is anonymous (DSR's)can be used to ruin someone's business.  Whether you received 4's, 1's, 5's....If you are going to ruin someone's business surely you must have to prove it.  Positive feedback and all 1's, and yet ebay won't remove.  I just don't get it.  "Sorry, you have fallen below our standards, you're outta here," well, I for one would want to see actual proof and be able to contest it.  

Good luck in your lawsuit!

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