EcommerceBytes-NewsFlash, Number 813 - July 26, 2004     1 of 4

Appeals Court Rules in eBay Feedback Liability Lawsuit

Email This Story to a Friend

Michael Geist reported in the July 23 issue of BNA's Internet Law News ( that a California appeals court has made its ruling in the Grace v. eBay case, a lawsuit went to the heart of eBay's Feedback System, a method for rating a transaction that ultimately helps establish a member's reputation.

Robert Grace sued eBay and his trading partner after eBay refused to remove negative comments made by Grace's trading partner.

The appellate court concluded, "the written release in eBay's User Agreement relieves eBay of the liability alleged in the complaint," therefore affirmed the original judgement.

However, it did not agree with the Superior court conclusion that title 47 U.S. Code section 230 (section 230), part of the Communications Decency Act of 1996, immunized eBay against liability for libel. "We conclude that section 230 provides no immunity against liability for a distributor of information who knew or had reason to know that the information was defamatory."

According to's reporting of the decision (, its up to the California Supreme Court to decide the liability issue in a separate case pending before it.

Earlier this month, BNA's Internet Law News newsletter reported that a German court ordered eBay to remove a negative feedback rating of an eBay seller because the rating was "objectively unjustified."

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

You may quote up to 50 words of any article on the condition that you attribute the article to and either link to the original article or to
All other use is prohibited.