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This article is about the online auction center. For the parody of "I Want It That Way", see eBay (song).
eBay Inc.
eBay corporate logo
File:EBay.png
The eBay homepage in Firefox
Type of businessPublic (Nasdaq: EBAY)
Type of site
online auction
Available inMultilingual
FoundedUnited States San Jose, California, USA (September 3, 1995)
Headquarters
San Jose, California
,
USA
Key peopleMeg Whitman, CEO & President
Pierre Omidyar, Founder and Chairman
John Donahoe, Chief of eBay Marketplace
IndustryAuctions
ProductsOnline auction hosting, Electronic commerce, Shopping mall
PayPal, Skype, Gumtree
RevenueIncrease$5.969 billion USD (2006)
Employees11,600 (Q1 2006)
URLwww.ebay.com
List of domain names
Registrationrequired to buy and sold
LaunchedSeptember 3, 1995
eBay headquarters in San Jose
eBay North First Street satellite office campus (home to PayPal)

eBay Inc. (Nasdaq: EBAY) is an American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. In addition to its original U.S. website, eBay has established localized websites in several other countries. eBay Inc also owns PayPal, Skype, and other businesses.

Origins and early history

The online auction web site was founded in San Jose, California on September 3, 1995 by computer programmer Pierre Omidyar as AuctionWeb,[1] part of a larger personal site that included, among other things, Omidyar's own tongue-in-cheek tribute to the Ebola virus.[2]

The very first item sold on eBay was a broken laser pointer for $14.83. Astonished, Omidyar contacted the winning bidder and asked if he understood that the laser pointer was broken. In his responding email, the buyer explained: "I'm a collector of broken laser pointers."[3] The frequently repeated story that eBay was founded to help Omidyar's fiancée trade PEZ Candy dispensers was fabricated by a public relations manager in 1997 to interest the media. This was revealed in Adam Cohen's 2002 book[2] and confirmed by eBay.

Chris Agarpao was hired as eBay's first employee and Jeffrey Skoll was hired as the first president of the company in 1996. In November 1996, eBay entered into its first third-party licensing deal, with a company called Electronic Travel Auction to use SmartMarket Technology to sell plane tickets and other travel products. The company officially changed the name of its service from AuctionWeb to eBay in September 1997. Originally, the site belonged to Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried to register the domain name echobay.com(this company's slogan is now "What eBay could have been.") but found it already taken by the Echo Bay Mines, a gold mining company, so he shortened it to his second choice, eBay.com. [4]

eBay went public in 1998, and both Omidyar and Skoll became instant billionaires.[3] The company purchased PayPal on October 14 2002.

International

In addition to its original U.S. website, eBay has established localized websites in several other countries:

Country/region Website Language Launch date
 Argentina http://www.mercadolibre.com.ar/ Spanish ?
 Australia http://www.ebay.com.au/ English Error in Template:Date table sorting: days must be an integer between 1 and 31[5]
 Austria http://www.ebay.at/ German Error in Template:Date table sorting: days must be an integer between 1 and 31[6]
 Belgium http://www.ebay.be/ Dutch, French ?
 Brazil http://www.mercadolivre.com.br/ Portuguese ?
 Canada http://www.ebay.ca/ English, French Error in Template:Date table sorting: days must be an integer between 1 and 31[7]
 China http://www.ebay.com.cn/ Chinese ?
 France http://www.ebay.fr/ French ?
 Germany http://www.ebay.de/ German ?
 Hong Kong http://www.ebay.com.hk/ Chinese, English Error in Template:Date table sorting: days must be an integer between 1 and 31[8]
 India http://www.ebay.in/ English ?
 Ireland http://www.ebay.ie/ English Error in Template:Date table sorting: days must be an integer between 1 and 31[9]
 Italy http://www.ebay.it/ Italian Error in Template:Date table sorting: days must be an integer between 1 and 31[10]
 Malaysia http://www.ebay.com.my/ English Error in Template:Date table sorting: days must be an integer between 1 and 31[11]
 Mexico http://www.mercadolibre.com.mx/ Spanish ?
 Netherlands http://www.ebay.nl/ Dutch ?
 New Zealand http://pages.ebay.com/nz English Error in Template:Date table sorting: days must be an integer between 1 and 31[9]
 Philippines http://www.ebay.ph/ English Error in Template:Date table sorting: days must be an integer between 1 and 31[12]
 Poland http://www.ebay.pl/ Polish Error in Template:Date table sorting: days must be an integer between 1 and 31[13]
 Singapore http://www.ebay.com.sg/ English Error in Template:Date table sorting: days must be an integer between 1 and 31[14]
 South Korea http://www.auction.co.kr/default.html Korean ?
 Spain http://www.ebay.es/ Spanish Error in Template:Date table sorting: days must be an integer between 1 and 31[15]
 Sweden http://www.tradera.com/ Swedish ?
  Switzerland http://www.ebay.ch/ German, French Error in Template:Date table sorting: days must be an integer between 1 and 31[9]
 Taiwan http://www.ruten.com.tw/ Taiwanese ?
 Turkey http://www.gittigidiyor.com/ Turkish ?
 United Kingdom http://www.ebay.co.uk/ English Error in Template:Date table sorting: days must be an integer between 1 and 31[16]
 United States http://www.ebay.com/ English Error in Template:Date table sorting: days must be an integer between 1 and 31

Items and services

Millions of collectibles, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily. In 2005, eBay launched its Business & Industrial category, breaking into the industrial surplus business. Some items are rare and valuable, while many others are dusty gizmos that would have been discarded if not for the thousands of eager bidders worldwide. Anything can be sold as long as it is not illegal or does not violate the eBay Prohibited and Restricted Items policy.[17] Services and intangibles can be sold, too. Large international companies, such as IBM, sell their newest products and offer services on eBay using competitive auctions and fixed-priced storefronts. Regional searches of the database make shipping slightly faster and cheaper. Separate eBay sites such as eBay US and eBay UK allow the users to trade using the local currency as an additional option to PayPal. Software developers can create applications that integrate with eBay through the eBay API by joining the eBay Developers Program.[18] As of June 2005, there were over 15,000 members in the eBay Developers Program, comprising a broad range of companies creating software applications to support eBay buyers and sellers as well as eBay Affiliates.

Controversy has arisen over certain items put up for bid. For instance, in late 1999 a man offered one of his kidneys for auction on eBay, attempting to profit from the potentially lucrative (and, in the United States, illegal) market for transplantable human organs. On other occasions, people and even entire towns have been listed, often as a joke or to garner free publicity. In general, the company removes auctions that violate its terms of service agreement within a short time after hearing of the auction from an outsider; the company's policy is to not pre-approve transactions. eBay is also an easy place for unscrupulous sellers to market counterfeit merchandise, which can be difficult for novice buyers to distinguish without careful studying of the auction description.

eBay's Latin American partner is MercadoLibre.

eBay's rivals include Amazon.com Marketplace.

eBay Express

File:Ebay express.gif

In April of 2006, eBay opened its new eBay Express site, which is designed to work like a standard Internet shopping site to consumers with United States addresses (eBay Express). Selected eBay items are mirrored on eBay Express where buyers shop using a shopping cart to purchase from multiple sellers. The UK version was launched to eBay members in mid October 2006 (eBay Express UK), and differs from the US version by only offering brand new items from pre-vetted business sellers. The German version was also opened in 2006 (eBay Express Germany).

eBay Blogs, eBay Community Wiki, eBay Mobile

In June of 2006, eBay added an eBay Community Wiki and eBay Blogs to its Community Content which also includes the Discussion Boards, Groups, Answer Center, Chat Rooms, and Reviews & Guides. Ebay has a robust mobile offering, including SMS alerts, a WAP site, and J2ME clients, available in certain markets.

Auction types

eBay offers several types of auctions.

  • Auction-style listings allow the seller to offer one or more items for sale for a specified number of days. The seller can establish a reserve price.
  • Fixed Price format allows the seller to offer one or more items for sale at a Buy It Now price. Buyers who agree to pay that price win the auction immediately without submitting a bid.
  • Dutch Auctions allow the seller to offer two or more identical items in the same auction. Bidders can bid for any number from one item up to the total number offered.

Bidding

For Auction-style listings, the first bid must be at least the amount of the minimum bid set by the seller. Regardless of the amount the first bidder actually bids, until a second bid is made, eBay will then display the auction's minimum bid as the current high bid. After the first bid is made, each subsequent bid must be equal to at least the current highest bid displayed plus one bidding increment. The bidding increment is established by eBay based on the size of the current highest displayed bid. For example, when the current highest bid is less than or equal to $0.99, the bidding increment is $0.05; when the current highest bid is at least $1.00 but less than or equal to $4.99, the bidding increment is $0.25. Regardless of the amount each subsequent bidder bids, eBay will display the lesser of the bidder's actual bid and the amount equal to the previous highest bidder's actual bid plus one bidding increment. For example, suppose the current second-highest bid is $2.05 and the highest bid is $2.40. eBay will display the highest bid as $2.30, which equals the second-highest bid ($2.05) plus the bidding increment ($0.25). In this case, eBay will require the next bid to be at least $2.55, which equals the highest displayed bid ($2.30) plus one bidding increment ($0.25). The next bid will display as the actual amount bid or $2.65, whichever is less. The figure of $2.65 in this case comes from the then-second-highest actual bid of $2.40 plus the bidding increment of $0.25. The winning bidder pays the bid that eBay displays, not the amount actually bid. Following this example, if the next bidder is the final bidder, and bids $2.55, the winner pays $2.55, even though it is less than the second-highest bid ($2.40) plus one bidding increment ($0.25). However, if the next bidder is the final bidder and bids an arbitrarily large amount, for example $10.00 or even more, the winner pays $2.65, which equals the second-highest bid plus one bidding increment.

For Dutch Auctions, which are auctions of two or more identical items sold in one auction, each bidder enters both a bid and the number of items desired. Until the total number of items desired by all bidders equals the total number of items offered, bidders can bid any amount greater than or equal to the minimum bid. Once the total numbers of items desired by all bidders is greater than or equal to the total number offered, each bidder is required to bid one full bidding increment above the currently-displayed winning bid. All winning bidders pay the same lowest winning bid.

eBay has established detailed rules about bidding, retraction of bids, shill bidding (collusion to drive up the price), and other aspects of bidding. These rules can be viewed on the help pages.

Profit and transactions

eBay generates revenue from a number of fees. The eBay fee system is quite complex; there are fees to list a product and fees when the product sells, plus several optional fees, all based on various factors and scales. The U.S.-based ebay.com takes $0.20 to $80 per listing and 5.25% or less of the final price (as of 2007). The UK based ebay.co.uk (ebay.co.uk offices) takes from GBP £0.15 to a maximum rate of GBP £3 per 100 for an ordinary listing and from 0.75% to 5.25% of the final price. In addition, eBay now owns the PayPal payment system which has fees of its own.

Under current U.S. law, a state cannot require sellers located outside the state to collect a sales tax, making deals more attractive to buyers. Although state laws require purchasers to pay sales tax to their own states on out-of-state purchases, most people ignore this requirement.[citation needed]

The company's current business strategy includes increasing revenue by increasing international trade within the eBay system. eBay has already expanded to over two dozen countries including China and India. The only places where expansion failed were Taiwan and Japan, where Yahoo! had a head start.

Acquisitions and investments

  • In July 1998, eBay acquired Cincinnati, Ohio based online auction site Up4Sale.com.[19]
  • In May 1999, eBay acquired the online payment service Billpoint[20], an unsuccessful competitor to PayPal, which they closed following the 2002 acquisition of the latter.[21]
  • In 1999 eBay acquired the auction house Butterfield & Butterfield[22], which it sold in 2002 to Bonhams.[23]
  • In 1999 eBay acquired the auction house Alando for $43 million, which changed then to eBay Germany.[24]
  • In June 2000 eBay acquired Half.com for $318 million, which was later integrated with the eBay Marketplace.[25]
  • In December 2000 eBay acquired the Precision Buying Service portion of Deja.com.[26]
  • In August, 2001, eBay acquired Mercado Libre[27] and Lokau, Latin American auction sites. eBay also acquired iBazar,[28] a French auction site.
  • In July, 2002 eBay acquired PayPal, for $1.5 billion in stock.[29]
  • On January 31 2003, eBay acquired CARad.com, an auction management service for car dealers.[30]
  • On July 11 2003 eBay Inc. acquired EachNet, a leading ecommerce company in China, paying approximately $150 million in cash.[31]
  • On June 22 2004, eBay acquired all outstanding shares of Baazee.com, an Indian auction site for approximately $50 million in US cash, plus acquisition costs. Baazee.com subsequently became eBay India.[32]
  • On August 13 2004, eBay took a 25% stake in Craigslist by buying out an existing shareholder who was once a Craigslist employee.
  • In September 2004, eBay moved forward on its acquisition of Korean rival Internet Auction Co. (IAC), buying nearly 3 million shares of the Korean online trading company for 125,000 Korean won (about US$125) per share.
  • In November 2004, eBay acquired Marktplaats.nl for €225 million. This was a Dutch competitor which had an 80% market share in the Netherlands, by concentrating more on small ads than actual auctions. Marktplaats is the Dutch word for Marketplace.
  • On December 16 2004, eBay acquired Rent.com for $415 million in cash (original deal was for $385 million of the amount in eBay stock plus $30 million in cash).
  • In May 2005, eBay acquired Gumtree, a network of UK local city classifieds sites.
  • On May 18 2005, eBay acquired the Spanish classifieds site Loquo.
  • In June 2005, eBay acquired Shopping.com, an online comparison site for $635 million.
  • At the end of June 2005, eBay acquired the German language classifieds site Opus Forum.
  • In September 2005, eBay bought Skype, a VoIP company, for $2.6 billion in stock and cash.
  • In April 2006, eBay invested $2 million in the Meetup.com social networking site.[33]
  • In April 2006, eBay acquired Tradera, Sweden's leading online auction-style marketplace for $48 Million.
  • In August 2006, eBay announced international cooperation with Google. Financial details have not been disclosed by either party.[34]
  • In February 2007, eBay acquired online ticket marketplace StubHub for $307 million.
  • In May 2007, eBay acquired a minority stake in GittiGidiyor.
  • In May 2007, eBay acquired the website StumbleUpon for approximately $75 million. [35]

Controversy and criticisms

eBay has its share of controversy, ranging from its privacy policy (eBay typically turns over user information to law enforcement without a subpoena)[citation needed] to well-publicized seller fraud. eBay claims that their data shows that less than .01% of all transactions result in a confirmed case of fraud. However, eBay states that their stated fraud statistic both undercounts and overcounts fraud.[36]

Fraud

One mechanism eBay uses to combat fraud is its feedback system. After every transaction, both the buyer and seller have the option of rating each other. They can give a "positive", "negative", or "neutral" rating and leave a comment no longer than 80 characters. So if a buyer has problems, he or she can rate the seller "negative" and leave a comment such as "never received product".

Weaknesses of the feedback system include:[37][38]

  • Small and large transactions carry the same weight in the feedback summary. It is therefore easy for a dishonest user to initially build up a deceptive positive rating by buying or selling a number of very low value items, such as e-books, recipes, etc., then subsequently switching to fraud.
  • A user may be reluctant to leave honest feedback out of fear of negative retaliatory feedback (including "negative" in retaliation for "neutral").
  • Users and generators of feedback may have different ideas about what it means. eBay offers virtually no guidelines.
  • Feedback and responses to feedback are allotted only 80 characters each. This can prevent users from being able to fully list valid complaints.
  • Although eBay protects sellers from getting a negative feedback from a deadbeat buyer when the deadbeat buyer/bidder did not respond to Unpaid Item dispute, they do not offer the same protection for a buyer who gets a deadbeat seller.

eBay acknowledges weaknesses in its feedback system on its own policy pages, noting several of the above points.[39]

When a user feels that a seller or buyer has been dishonest, a dispute can be filed with eBay. An eBay account (whether seller, buyer or both) may be suspended if there are too many complaints against the account holder.

The greatest problem with feedback is a poor understanding of how to use it. Many new members mistakenly use it as a communication forum which results in the loss of their ability to leave actual feedback at the conclusion of a transaction. Other members, especially new members, only glance at the overall percentage rating and assume if it is high, the seller must be trustworthy. This is not accurate if the account has been hi-jacked (taken over by a criminal) using a Spoof website. A hijacker can take over an account with a high positive rating, then post expensive items with no intention to ship anything. Such accounts can be identified more than 90% of the time by a simple check of the seller's feedback history.[40] By looking at the past selling history of a seller, the buyer can easily identify hijacked accounts through inconsistencies with past auctions. The buyer must look for differences in the auction layout when compared to past auctions. If the auction format has substantially changed, for instance old auctions used good grammar and normal punctuation and new auctions use poor grammar and are filled with punctuation errors, that indicates the person posting the new auction is not the account owner but a hijacker.[41]. Simple checks like these can help members avoid many scams.

EBay allows Mystery Box and Mystery Envelope auctions, however these are almost all fraudulent auctions because the seller can manipulate the box contents to make sure it is never a good deal for the buyer.[42] Mystery Envelope auctions offer cash prizes of an undisclosed amount to auction winners. The auction winner usually receives from 10% to 30% of the money they paid for the auction back in 'winnings'.[43] Mystery Envelope auctions are considered by many to be illegal lotteries.

Professional scammers target new members to take advantage of their unfamiliarity with how eBay or PayPal work.[44] New members can be easily tricked into thinking there is a special website they should make payments through(which is in fact a fake site setup by a scammer) or they may be tricked more easily into using a fake escrow company.

Many complaints have been made about eBay's system of dealing with fraud, leading to its being featured on the British consumer rights television program Watchdog. It is also regularly featured in The Daily Mirror's Consumer Awareness page. The complaints are generally that eBay sometimes fails to respond when a claim is made. Since eBay makes its money on commissions from listings and sales, it may not be in eBay's interest to take action against large sellers. [citation needed]

Frauds that can be committed by sellers include:

  • Receiving payment and not shipping merchandise
  • Shipping items other than those described
  • Giving a deliberately misleading description
  • Knowingly and deliberately shipping faulty merchandise
  • Counterfeit or bootleg merchandise
  • Knowingly selling stolen goods
  • Inflating total bid amounts by bidding on their own auction with "shill" account(s), either the seller under an alternate account or another person in collusion with the seller. Shill bidding is prohibited by eBay and, in at least one high-profile case involving Kenneth Walton (and his accomplices Kenneth Fetterman and Scott Beach) has been prosecuted by the federal government as criminal fraud.

Frauds committed by buyers include:

  • PayPal fraud: Filing false shipping damage claim with the shipping company and with PayPal.
  • Credit card fraud, in the form of both stolen credit cards and fraudulent chargebacks.
  • Receiving merchandise and claiming otherwise
  • Returning items other than received
  • The buyer sends a forged payment-service e-mail which states that the buyer has made a payment to the seller's account. An unsuspecting seller may ship the item before realizing the e-mail was forged.

Combatting fraud:

  • Third party businesses, such as CheckMEND, are compiling lists of stolen goods from local authorities and businesses so eBay consumers can check to see whether the goods they are buying are stolen.
  • Third party software is available which will alert users if they are tricked into going to a spoof website such as the MyLittleMole Toolbar which is free.[45] Use of such software could potentially eliminate eBay account hijacking.

Other controversial practices of users

  • Sellers of inexpensive items may benefit from inflating the shipping cost while lowering the starting price for their auctions,[46] because some buyers overlook the shipping cost when calculating the amount they are willing to spend. Since eBay charges their fees based on final sales price without including shipping, this allows sellers to reduce the amount they pay eBay in fees (and also allows buyers to reduce or avoid import fees and sales taxes). This is called "fee avoidance", and is prohibited by eBay policy,[47] as are excessive shipping and handling charges.[48] A danger to the buyer in such cases is that in the event of defective merchandise, the seller may claim to have met his refund obligations by returning only the minimal purchase price and not the shipping costs.
  • Sellers sometimes charge fees for use of PayPal as well to cover the fees that PayPal charges them. Although this is officially banned by eBay and PayPal (except in the UK) and is against some local laws as well as violating merchant agreements with Visa, MasterCard, and Discover (again, except in the UK), eBay does sometimes police for this and will suspend auctions where the seller requests an additional fee for taking PayPal. Therefore, inexperienced users often wind up paying these illegal and unenforceable fees.[citation needed]
  • Auction sniping is the process of watching a timed online auction, and placing a winning bid at the last possible moment (often literally seconds before the end of the auction), giving the other bidders no time to outbid the sniper. Some bidders do this manually, and others use online services and software designed for the purpose. While disliked by many eBay users, sniping is not against eBay rules as users are expected to put in their maximum bid from the start and the system will automatically bid up on their behalf.
  • Burying shipping charges or undesirable terms in a large amount of text.

Stealing ebay accounts

According to Ofer Elzam from Aladdin Knowledge Systems Ltd., there is a botnet which steals e-bay accounts. [49] The attacks use such techniques as compromising genuine websites with SQL injection, inserting IFrame code which redirects visitors to other sites which host a Trojan. Trojan-infected computers are used to provide a brute search for login/password pairs, using XML-formatted code to communicate with ebay servers directly.

Intellectual property in auctions

Holders of intellectual property rights, have claimed that eBay profits from the infringement of intellectual property rights. eBay has responded by creating the Verified Rights Owner (VeRO) program, which provides to rightsholders expedited auction takedowns and private information on eBay users, but has likewise been criticized.

  • In June 2004, the jeweler Tiffany & Co. sued eBay claiming that eBay profits from the sale of counterfeit Tiffany products.[50] As of July 2006, a trial date has not been set.[51]
  • In September 2005, eBay's privacy practices relating to its VeRO program came under scrutiny when WNDU-TV reported that the Embroidery Software Protection Coalition was accusing United States buyers, identified by eBay, of copyright infringement, and demanding monetary settlements. eBay's privacy policy warns that eBay may disclose personal information on the request of any VeRO rightsholder investigating illegal activity;[52] in comparison, competing service Yahoo! Auctions may disclose personal information in response to a subpoena or court order.[53] Although, according to a University of Notre Dame law professor, there is no legal basis, in the United States, for copyright infringement claims against buyers,[54] eBay's VeRO program may have allowed the ESPC to obtain private information without judicial oversight.
  • Some manufacturers have abused eBay's VeRo program, through which copyright and trademark owners can quickly protect their rights, by seeking to prevent all sales of their products on eBay.[citation needed]
  • In November 2006, a U.K. High Court ruled that a VeRO rightsholder's takedown request to eBay constituted a legal threat under design patent law. Since groundless legal threats under design patent law are unlawful, the ruling holds that groundless VeRO takedown requests based on design patents are also unlawful. Further, the text of the ruling appears critical of the VeRO program in general: "It is entirely wrong for owners of intellectual property rights to attempt to assert them without litigation, or without the threat of litigation, in reply."[55]

Customer support

A source of frustration for some eBay users is that owing to the company's size, it offers no customer support by phone for general members, instead referring them to its online help features. Apart from a library of self-help resources, these features consist mainly of e-mail contact forms and "Live Help," which lets users chat with customer service representatives via instant messaging, although this is not available to users on international sites such as eBay.co.uk.

eBay does offer phone support that is limited to members of the rank "Silver PowerSeller" and above, the company's term for members who sell at least $3,000 worth of goods per month on the site, as well as to eBay Store owners. The phone number for that service is not published, although there have been reports on eBay's own forums and weblogs that customers who manage to obtain the number through legal documents receive rude replies and are told to use the online service instead.[56][57][58]

Other eBay controversies

Other notable controversies involving eBay include:

  • In May 2000, eBay seller Kenneth Walton auctioned an oil painting on eBay for $135,805, due to speculation that it might be the work of California modernist Richard Diebenkorn. Walton pretended to know nothing about art and claimed to be surprised by the price the painting fetched, and the auction attracted international media attention. In several investigative reports by The New York Times, it was revealed that Walton was in fact an experienced eBay art dealer with several unhappy customers, and that he had colluded with two other eBay sellers to bid up each other's auctions. The Times described this as a "shill bidding ring".[59] Walton and his cohorts were banned from eBay and eventually convicted of fraud by the federal government in the first ever prosecution for shill bidding on eBay.
  • On May 28 2003, a U.S. District Court jury found eBay guilty of willful patent infringement and ordered the company to pay $35 million in damages. The plaintiff was MercExchange, which had accused eBay in 2000 of infringing on three patents (one of which is used in eBay's "Buy It Now" feature for fixed-price sales, 30 percent of eBay's business and growing). The decision was appealed to the U.S. Court of Appeals for the Federal Circuit (CAFC). The CAFC affirmed the judgment of willful infringement, and reversed the lower court and granted a permanent injunction. eBay appealed the permanent injunction to the U.S. Supreme Court, which on May 15, 2006 found an injunction is not required nor automatic in this or any patent case where guilt has been established. The case was sent back to the Virginia district court for consideration of the injunction and a trial on another MercExchange patent the inventor claims covers the remaining 70 percent of eBay's business model (see eBay Inc. v. MercExchange, L.L.C. [60]). This case has been particularly controversial since the patents involved are considered to be business method patents (see Software patent debate).
  • On July 28 2003, eBay and its subsidiary PayPal agreed to pay a $10 million fine to settle allegations that they aided illegal offshore and online gambling. According to the settlement, between mid-2000 and November 2002, PayPal transmitted money in violation of various U.S. federal and state online gambling laws.[61] eBay's announcement of its acquisition of PayPal in early July said that PayPal would begin the process of exiting this market, and was already doing so when the ruling occurred.[62] These offenses occurred prior to eBay's purchase of PayPal.
  • On December 17 2004, Avnish Bajaj, CEO of eBay's Indian subsidiary Baazee.com, was arrested after a video clip showing oral sex between two Indian students was sold online. The company denied knowing the content of what they were selling (because it is a venue, not a retailer) and removed the offensive material as soon as they became aware of it. The Indian government attempted to make the case that Bajaj had violated India's IT Act, which forbids "publishing, transmitting or causing to publish" obscene material, even though the actual material was never published on Baazee's servers.[63] eBay supported Baazee's defense.[64]
  • On December 18 2006 eBay won a court case against Creative Festival Entertainment in Australia, allowing sellers to on-sell (or scalp) tickets for the Big Day Out concert.[67] The case was won due to the Big Day Out organizers not being able to fully enforce an anti-scalping policy printed on the back of the tickets. The presiding judge described the decision as "unfortunate".[68]
  • eBay discourages sellers from using independent money-wiring companies such as Western Union and MoneyGram (Moneybookers is now allowed instead), stating that it prohibits or discourages certain forms of payment in order to reduce fraud.[72] On the U.S. eBay site, while sellers may accept such payments, they are prohibited from advertising them as a payment option. A similar policy applies to mailing cash as a payment option. Certain non-U.S. branches of eBay allow sellers to advertise wire transfers or mailed cash as payment options, provided such methods are not the only payment options the seller accepts.[73][74]
  • In late 2006 eBay effected a policy change which showed less information about sellers once auctions reached a certain value. This policy has been criticized for making shill bidding much harder to detect, to the potential disadvantage of buyers and significant advantage to unethical sellers who may artificially inflate the price of an auction. An investigation by The Sunday Times in January 2007 uncovered substantial evidence of shill bidding on eBay.[75]

Prohibited or restricted Items

eBay in its earliest days was essentially unregulated, but as eBay grew, it found it necessary to restrict or forbid auctions for various items. Note that some of the restrictions relate to eBay.com (the US site), while other restrictions apply to specific European sites (such as Nazi paraphernalia). Regional laws and regulations may apply to the seller or the buyer. Among the hundred or so banned or restricted categories:

  • Tobacco (tobacco-related items and collectibles are excepted)[76]
  • Alcohol (alcohol-related collectibles, including sealed containers, as well as some wine sales by licensed sellers are allowed)[77]
  • Drugs and drug paraphernalia[78]
  • Nazi paraphernalia[79]
  • Bootleg recordings[80]
  • Firearms and ammunition[81], including any parts that could be used to assemble a firearm as well as (as of July 30, 2007) any firearm part that is required for the firing of a gun, including bullet tips, brass casings and shells, barrels, slides, cylinders, magazines, firing pins, trigger assemblies, etc. Crossbows and various types of knives are also forbidden
  • Used underwear (see Panty fetishism) and dirty used clothing[82]
  • Teachers' editions of textbooks including homeschool teacher's editions.[83][84]
  • Human parts and remains[85]
  • Live animals (with certain exceptions)[86]
  • Certain copyrighted works or trademarked items.[87]
  • Lottery tickets, sweepstakes tickets, or any other gambling items.
  • Military hardware such as working weapons or explosives.
  • Virtual items from massively multiplayer online games.[88][89]
  • Many other items are either wholly prohibited or restricted in some manner.[90] One major example includes several eBay members auctioning debris from the Space Shuttle Columbia following its February 1, 2003 breakup over Texas and Louisiana on re-entry from space. These auctions were removed immediately by eBay.[citation needed] In addition, there are some items that can be temporarily prohibited or restricted following a notable current event, such as World Trade Center memorabilia, whose auctions were temporarily suspended following the 9/11 attacks. [citation needed]

Unusual sale items

  • In June 2005, the wife of Tim Shaw, a British radio DJ on Kerrang! 105.2, sold Tim's Lotus Esprit sports car with a Buy It Now price of 50 pence after she heard him flirting with model Jodie Marsh on air. The car was sold within 5 minutes, and it was requested that the buyer pick it up the same day.[91]
  • In May 2005, a Volkswagen Golf that had previously been registered to Joseph Cardinal Ratzinger (who had been elected Pope Benedict XVI) was sold on eBay's German site for €188,938.88. The winning bid was made by the GoldenPalace.com online casino, known for their outrageous eBay purchases.[92]
  • A seaworthy 16,000 ton aircraft carrier, formerly the British HMS Vengeance, was listed early in 2004. The auction was removed when eBay determined that the vessel qualified as ordnance, even though all weapons systems had been removed.[93]
  • In September 2004, the owner of MagicGoat.com sold the contents of his trash can to a middle school language arts teacher, who intended to have her students write essays about the trash before it was cleared away by a well-meaning janitor.[94]
  • Water that was said to have been left in a cup Elvis Presley once drank from was sold for $455. The few tablespoons came from a plastic cup Presley sipped at a concert in North Carolina in 1977.[95]
  • A Coventry University student got £1.20 for a single cornflake.[96]
  • A man from Brisbane, Australia attempted to sell New Zealand at a starting price of $.01AUD. The price had risen to $3,000 before eBay closed the auction.[97]
  • One of the tunnel boring machines involved in the construction of the Channel Tunnel was auctioned on eBay in 2004.[98]
  • A group of four men from Australia auctioned themselves to spend the weekend with the promise of "beers, snags, good conversation and a hell of a lot of laughs" for AU$1,300[99]
  • Disney sold a retired Monorail Red (Mark IV Monorail) for $20,000[100]
  • The German Language Association sold the German language to call attention for the growing influence of Pidgin-English in modern German.[101]
  • In late November 2005, the original Hollywood Sign was sold on eBay for $450,400.[102][103]
  • In February 2007, after Britney Spears shaved all of her hair off in a Los Angeles salon, it was listed on eBay for $1million USD before it was taken down after some considerable controversy.[104]
  • Bridgeville, California was the first city to be sold on eBay in 2002, and has been up for sale 3 times since.[105]
  • Boston Red Sox left fielder Manny Ramírez attempted to sell his neighbor's JENN-AIR Gas Grill on eBay. The auction started at $3,000 and the price escalated to an astounding $99,999,999, the maximum amount allowed by eBay. The auction was later closed by eBay because of the promise of an autographed baseball going to the winner as well as the grill; it is a violation of eBay policy to include items other than those advertised.[106]
  • In April 2004, American entrepreneur Matt Rouse sold the right to choose a new middle name for him. After receiving an $8,000 "Buy It Now" bid, the Utah courts refused to allow the name change. He currently still has his original middle name "Jean".[107]

Charity auctions

Using MissionFish as an arbiter, eBay allows sellers to donate a portion of their auction proceeds to a charity of the seller's choice. Some high profile charity auctions have been advertised on the eBay home page, and have raised large amounts of money in a short time. For example, a furniture manufacturer raised over $35,000 for Ronald McDonald House by auctioning off beds that had been signed by celebrities.[citation needed]

To date, the highest successful bid for a single item for charity was a letter sent to the owner of Clear Channel by Harry Reid and forty other Democratic senators to have a talk with conservative talk show host Rush Limbaugh. The winning bid was $2,100,100, with 100% of the proceeds going to the Marine Corps-Law Enforcement Foundation, benefiting the education of children of fallen men and women serving in the armed forces.

See also

Notes and references

  1. ^ misc.forsale.non-computer post about Auctionweb
  2. ^ a b Cohen, Adam. The Perfect Store. ISBN 0-316-16493-3. {{cite book}}: Unknown parameter |publishdate= ignored (help)
  3. ^ a b How did eBay start?, About.com. Retrieved on 2007-01-26.
  4. ^ http://www.happynews.com/living/online/history-ebay.htm
  5. ^ "eBay Fact Sheet" (PDF). eBay. eBay Inc. 2006-03-31. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  6. ^ "eBay Launches Service for Austria". eBay Inc. - Investor Relations. eBay Inc. 2000-12-18. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  7. ^ "Gary Briggs Appointed Vice President and Country Manager of eBay Canada". eBay Canada. eBay Inc. 2004-04-28. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  8. ^ "eBay Launches Service For Hong Kong". eBay Inc. - Investor Relations. eBay Inc. 2003-12-21. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  9. ^ a b c "eBay Launches Service For Ireland, New Zealand And Switzerland". eBay Inc. - Investor Relations. eBay Inc. 2001-03-29. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  10. ^ "eBay Launches in Italy". eBay Inc. - Investor Relations. eBay Inc. 2001-01-15. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  11. ^ "eBay Launches Service for Malaysia". eBay Inc. - Investor Relations. eBay Inc. 2004-12-01. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  12. ^ "eBay Launches Service for the Philippines". eBay Inc. - Investor Relations. eBay Inc. 2004-11-16. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  13. ^ "eBay Launches Service for Poland". eBay Inc. - Investor Relations. eBay Inc. 2005-04-22. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  14. ^ "eBay Launches Service for Singapore". eBay Inc. - Investor Relations. eBay Inc. 2001-10-24. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  15. ^ "eBay.es Dossier de Prensa" (PDF). eBay.es. eBay Inc. January 2001. Retrieved 2007-11-09. {{cite web}}: Check date values in: |date= (help)
  16. ^ "eBay Worldwide". eBay.co.uk. eBay Inc. Retrieved 2007-11-09.
  17. ^ "Prohibited and Restricted Items - Overview". eBay. Retrieved 2006-06-28.
  18. ^ "eBay Developers Program". eBay. Retrieved 2006-06-28.
  19. ^ "Business Wire July 16, 1998". 1998-07-16. Retrieved 2007-07-08. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  20. ^ Clark, Tim. "eBay Acquires Two Firms". CNET News. Retrieved 2007-07-08. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  21. ^ Wolverton, Troy (2002-07-08). "Billpoint Failure a Lesson for eBay?". CNET News. Retrieved 2007-07-08. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  22. ^ "eBay Buys Butterfield & Butterfield Auction House". Computergram International. 1999-04-27. Retrieved 2007-07-08. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  23. ^ Wolverton, Troy (2002-08-01). "eBay Sells Traditional Auction Arm". CNET News. Retrieved 2007-07-08. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  24. ^ "eBay wins German Bid". CNN Money. 1999-06-22. Retrieved 2007-07-08. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  25. ^ Wilson, Noel (2000-06-13). "eBay Buying Half.com in Stock Deal". CNET News. Retrieved 2007-07-08. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  26. ^ "eBay Acquires Deja.com's Technology". www.internetnews.com. Retrieved 2007-01-05.
  27. ^ "eBay and MercadoLibre Join Forces in Latin America". Retrieved 2007-07-08.
  28. ^ "eBay Acquires iBazar". DSN Retailing Today. 2001-03-05. Retrieved 2007-07-08. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  29. ^ Kane, Margaret (2002-07-08). "eBay Picks up Paypal for $1.5 Billion". CNET News. Retrieved 2007-07-08. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  30. ^ "eBay Motors Announces Acquisition Agreement and New Strategic Relationship". Retrieved 2007-07-08.
  31. ^ Berniker, Mark (2003-07-12). "eBay Acquires Chinese Shopping Site EachNet". InternetNews.com. Retrieved 2007-07-08. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  32. ^ "eBay to Acquire India's Baazee.com". Retrieved 2007-07-08.
  33. ^ "Ebay ventures into social networking". blogspot.com. Retrieved 2006-06-17.
  34. ^ "Search Ads: Spreading the Word". iht.com. Retrieved 2006-06-26.
  35. ^ "eBay Investor Message". ebay.com. Retrieved 2007-09-10.
  36. ^ Chat with Rob Chesnut, Vice President of eBay's Trust & Safety Department
  37. ^ "eBay Feedback: Fatally Flawed?".
  38. ^ "San Francisco Bay Guardian - Bias on eBay".
  39. ^ "eBay.com Feedback Policies - Overview".
  40. ^ "Scams And Scoundrels Book ISBN-13: 978-0-9774760-2-2".
  41. ^ "Don't Bid On It Book ISBN-13: 978-0-9774760-2-2".
  42. ^ "Scams And Scoundrels Book ISBN-13: 978-0-9774760-2-2".
  43. ^ "Scams And Scoundrels Book ISBN-13: 978-0-9774760-2-2 Chapter 8".
  44. ^ "PayPal-Scam.com".
  45. ^ "MyLittleMole Toolbar".
  46. ^ "...Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay". Berkeley Electronic Press. Retrieved 2006-06-26.
  47. ^ "Circumventing Fees". eBay. Retrieved 2006-06-11.
  48. ^ "Excessive Shipping & Handling". eBay. Retrieved 2006-06-11.
  49. ^ "Custom-built botnet steals eBay accounts".
  50. ^ "Tiffany sues eBay, says fake items sold on Web site". USA Today. March 22, 2004.
  51. ^ "Sure you bagged a bargain?". Courier Mail. News Limited. May 24, 2006.
  52. ^ "eBay Privacy Policy". Retrieved 2007-01-10.
  53. ^ "Yahoo! Privacy Center". Retrieved 2007-01-10.
  54. ^ "Contact 16: Embroidery software buyer under investigation". WNDU-TV. 2005-09-07. {{cite news}}: Check date values in: |date= (help)
  55. ^ "Design right threat fails to stop eBay sales". 2006-11-14. {{cite news}}: Check date values in: |date= (help)
  56. ^ "eBay's Superb Customer Service". 2006-09-19. Retrieved 2007-06-30.
  57. ^ Hafner, Katie (2004-12-30). "Customer Service: The Hunt for a Human". The New York Times. Retrieved 2007-06-30.
  58. ^ Hafner, Katie (2005-01-04). "Hunting a rare breed: Human online support". The New York Times. Retrieved 2007-06-30.
  59. ^ New York Times Article
  60. ^ "EBAY INC. ET AL. v. MERCEXCHANGE, L. L. C." (PDF). US Supreme Court. Retrieved 2006-06-17.
  61. ^ http://www.usatoday.com/tech/news/2003-07-25-paypal-gambling_x.htm
  62. ^ http://news.com.com/2100-1017-941964.html
  63. ^ Rai, Saritha. "EBay Fights India Arrest Over Sale of Sex Video".
  64. ^ http://investor.ebay.com/ReleaseDetail.cfm?ReleaseID=150878&FYear=
  65. ^ "eBay blocks further Live 8 sales". BBC News. June 23, 2005.
  66. ^ "yours-for-1000". SMH. Retrieved 2006-09-29.
  67. ^ "Federal Court decision on Big Day Out tickets". eBay. Retrieved 2007-02-05.
  68. ^ "EBay wins Big Day Out battle". ABC Local Radio. Retrieved 2007-02-05.
  69. ^ Geller, A. & Kahn, C. (April 21 2007). "Tech gunman bought ammo clips on eBay". {{cite news}}: Check date values in: |date= (help)CS1 maint: multiple names: authors list (link)
  70. ^ Geller, A. & Kahn, C. (April 22 2007). Internet key in probe in Va. Tech gunman. The Washington Post. Retrieved April 22 2007.
  71. ^ {{Citation + | last = Halprin + | first = Matt + | title = Message from Matt Halprin – New Listing Restrictions on Gun Parts + | date =July 30, 2007 + | year =2007 + | url = http://www2.ebay.com/aw/core/200707301000452.html + | accessdate = 08/26/2007 }}
  72. ^ "Accepted Payments Policy". eBay. Retrieved 2006-10-20.
  73. ^ "Ebay Singapore payment methods allowed". eBay. Retrieved 2006-10-23.
  74. ^ "Ebay UK payment methods allowed". eBay. Retrieved 2006-10-23.
  75. ^ http://www.consumeraffairs.com/news04/2007/01/ebay_shilling.html
  76. ^ http://pages.ebay.com/help/policies/tobacco.html
  77. ^ http://pages.ebay.com/help/policies/alcohol.html
  78. ^ http://pages.ebay.com/help/policies/drugs-drug-paraphernalia.html
  79. ^ http://pages.ebay.com/help/policies/offensive.html
  80. ^ http://pages.ebay.com/help/policies/bootlegs.html
  81. ^ http://pages.ebay.com/help/policies/firearms-weapons-knives.html
  82. ^ http://pages.ebay.com/help/policies/used-clothing.html
  83. ^ http://pages.ebay.com/help/policies/teachersedition.html
  84. ^ http://worldnetdaily.com/news/printer-friendly.asp?ARTICLE_ID=51702
  85. ^ http://pages.ebay.com/help/policies/remains.html
  86. ^ http://pages.ebay.com/help/policies/wildlife.html
  87. ^ http://pages.ebay.com/help/tp/programs-vero-ov.html
  88. ^ http://pages.ebay.com/help/policies/downloadable.html
  89. ^ http://arstechnica.com/news.ars/post/20070130-8731.html
  90. ^ http://pages.ebay.com/help/policies/ia/prohibited_and_restricted_items.html
  91. ^ "£25,000 revenge of DJ's wife". This Is London. June 21, 2005.
  92. ^ "Golf IV von Josef Kardinal Ratzinger". Golden Palace. Retrieved 2006-06-28.
  93. ^ "For internet sale: aircraft carrier, only three owners". Telegraph.co.uk. Retrieved 2007-07-28.
  94. ^ "eBay's Greatest Sale". Magic Goat. Retrieved 2006-06-28.
  95. ^ http://news.bbc.co.uk/1/hi/entertainment/music/4134407.stm
  96. ^ http://news.bbc.co.uk./1/hi/england/coventry_warwickshire/4137877.stm
  97. ^ http://tvnz.co.nz/view/page/411365/712869
  98. ^ "Eurotunnel drill bids reach £5m". BBC. April 5, 2004.
  99. ^ Hearn, Louisa (2006-01-17). "Blokes pull in the bids on eBay".
  100. ^ http://www.monorails.org/tMspages/CPMarkIV.html
  101. ^ "10 Millionen Euro für die deutsche Sprache [[:Template:De icon]]". {{cite web}}: URL–wikilink conflict (help)
  102. ^ "Hollywood Sign Sold For $450K".
  103. ^ "Buy a piece of HOLLYWOOD".
  104. ^ "Britney Spears' Shaved Hair on Sale on Ebay!".
  105. ^ http://news.bbc.co.uk/1/hi/world/americas/4875206.stm
  106. ^ "Manny Ramirez's Grill Auction Taken Off eBay".
  107. ^ "Matthew Sells The Middle".

Further reading

  • Belbin, David (2004). The eBay Book: Essential tips for buying and selling on eBay.co.uk. Harriman House Publishing. ISBN 1-897597-43-6.
  • Pugh, Robert (2006). The eBay Business Handbook. Harriman House. ISBN 9781897597682.
  • Wharton, Wiz (2007). How to Have a Baby on eBay. Harriman House. ISBN 9781905641161.
  • Cihlar, Christopher (2006). The Grilled Cheese Madonna and 99 Other of the Weirdest, Wackiest, Most Famous eBay Auctions Ever. Random House. ISBN 0-7679-2374-X.
  • Cohen, Adam (2002). The Perfect Store: Inside eBay. Little, Brown & Company. ISBN 0-316-15048-7.
  • Collier, Marsha (2004). eBay For Dummies. John Wiley. ISBN 0-7645-5654-1.
  • Hillis, Ken and Michael Petit with Nathan Epley (2006). Everyday eBay: Culture, Collecting and Desire. Routledge. ISBN 0-415-97436-4.
  • Jackson, Eric M. (2004). The PayPal Wars: Battles with eBay, the Media, the Mafia, and the Rest of Planet Earth. World Ahead Publishing. ISBN 0-9746701-0-3.
  • Kent, Peter & Finlayson, Jill (2005). Fundraising on eBay. McGraw-Hill. ISBN 0-07-226248-6.{{cite book}}: CS1 maint: multiple names: authors list (link)
  • Klink, Edward & Klink, Stephen (2005). Dawn of the eBay Deadbeats: True Tales of Treachery, Lies, and Fraud from the Dark Recesses of the World's Largest Online Auction Marketplace. Mooncusser Media. ISBN 0-9768372-1-8.{{cite book}}: CS1 maint: multiple names: authors list (link)
  • Nissanoff, Daniel (2006). FutureShop: How the New Auction Culture Will Revolutionize the Way We Buy, Sell and Get the Things We Really Want. The Penguin Press. ISBN 1-59420-077-7.
  • Spencer, Christopher Matthew (2006). The eBay Entrepreneur. Kaplan Publishing. ISBN 1-4195-8328-X.
  • Walton, Kenneth (2006). FAKE: Forgery, Lies, & eBay. Simon Spotlight Entertainment. ISBN 1-4169-0711-4.
  • Ford, Michael (2007). Scams & Scoundrels: Protect yourself from the dark side of eBay. Elite Minds Inc. ISBN 978-0-9774760-2-2.
  • Ford, Michael (2007). Dont Bid On It: Until I Tell You How eBay Really Works. Elite Minds Inc. ISBN 978-0-9774760-1-5.



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