eBay Settles Suit with Auction Search Site

Bringing an end to a lawsuit it filed over a year ago, eBay said Thursday that it had reached a settlement with online auction search site Bidder's Edge, which was barred last year by a court order from combing listings that were hosted on the Internet heavyweight's site.

eBay initially brought its action against Bidder's Edge -- a portal site that allowed users to search for items across 200 online auction sites, including those of Yahoo! and Amazon -- in December 1999 in the U.S. District Court for Northern California. In its case, eBay alleged that Bidder's Edge's search engine software had trespassed on eBay's computers, impaired site performance, committed computer fraud and misappropriation, and violated copyrights and other intellectual property.

eBay spokesperson Kevin Pursglove told the E-Commerce Times that as part of the settlement, Bidder's Edge has agreed to immediately refrain from using its software to crawl listings from eBay's database. In addition, Pursglove said that Bidder's Edge will pay eBay an undisclosed amount.

"We clearly think it's a victory for eBay," said Pursglove.

"It's also important for all Internet entrepreneurs, who have invested in valuable databases, that they can operate without fear that unwanted trespassers will steal and profit from the fruits of their labor," he added.

Appeal Dropped

For its part, Bidder's Edge had contended throughout the case that the information eBay was trying to protect was not its own, but rather data generated by its sellers.

While the judge presiding over the case eventually agreed with Bidder's Edge that its service did not constitute copyright infringement, the court found that the company's search results were likely a form of trespass and issued a injunction against Bidder's Edge, enjoining it from using its automated search system to comb eBay's listings.

Although Bidder's Edge appealed the district court ruling, it also modified its service last June with the introduction of a new eBay-only search option, which displayed results in a separate window and did not integrate its prices with any of the other auction sites that Bidder's Edge tracks.

Pursglove said that Bidder's Edge has dropped the appeal as part of the settlement. In addition, Bidder's Edge has abandoned its antitrust claims against eBay, said Pursglove. eBay has also dropped its original suit against Bidder's Edge.

Down, Not Out

The settlement comes one week after Burlington, Massachusetts-based Bidder's Edge shut down its site, saying that its business model could not be supported in the current market climate.

Despite the closure of its site, Bidder's Edge has maintained operations and is now looking to license its technology. However, Pursglove said that the settlement also bars Bidder's Edge's parent company from using its search software to crawl eBay's listings at any point in the future.

The Bidder's Edge site now redirects users to BidXS.com, a meta-search engine that aggregates listings from over 300 auction sites. BidXS, a two-year-old firm based in Los Angeles, said it has entered into a partnership agreement with eBay.

Bidding War

eBay began stepping up its efforts to block price comparison search software from probing its Web site in late 1999, barring Bidder's Edge, AuctionWatch.com and two other smaller auction sites from combing its millions of listings.

At issue was eBay's resistance to the growing use of shopping bots, which allow users to search for the lowest price on a product or auction item across multiple sites.

eBay's actions to fend off auction aggregators, however, also caught the attention of U.S. investigators, who launched a preliminary probe last year to determine whether the company was engaged in anti-competitive practices. No formal action was ever taken.

While several auction service companies have licensed the right to crawl eBay's auctions, the Internet heavyweight has maintained that it will continue to protect its site against unlicensed listings aggregators.