eBay Beats the Rap

If the Internet were a giant classroom, eBay would be the fair-haired child who never gets into trouble and always gets an “A” just because she always has. Never mind that on the playground she’s just as likely as the next kid to give someone a sharp kick in the shins.

Motorola just announced that it is suing to stop the illegal sale of its radio service software on eBay, calling the lawsuits the beginning of its “aggressive action” to stop the alleged piracy. But who is Motorola suing? The five individuals accused of making the illegal sales.

“We want it understood that we are not taking action against eBay,” Motorola spokesperson Laura Littel Zdon told the E-Commerce Times. “In fact, we would want eBay’s help.” Zdon’s comment was an apparent clarification of an earlier statement from Motorola indicating the company had “found eBay to be unresponsive to Motorola’s copyright concerns.”

eBay claims it is taking action to thwart copyright infringement on its site with the establishment of the “Verified Rights Owner (VeRO) Program.” VeRO “entitles” participants to report potential infringements to eBay, according to a posting on the site, and promises “rapid response.”

eBay’s program does little more than articulate the company’s willingness to comply with the law — but it is apparently enough to suggest a proactive stance on the infringement issue and convince companies like Motorola that eBay has its heart in the right place.

Act Sorry Before Collecting Profits

eBay has developed a knack for slinking out of trouble. The International League against Racism and Anti-Semitism (LICRA) filed a lawsuit against Yahoo! for offering Nazi artifacts for sale to French citizens, who are subject to strict anti-racism laws.

A French court subsequently ordered Yahoo! to stop the sales or to prevent French citizens from accessing them. The controversial case has earned Yahoo! a great deal of attention — most of it in the form of bad press. Despite the free speech issues involved, Yahoo! comes across as tainted in headlines that place the company’s name next to the word “Nazi.”

eBay allows the sale of Nazi stuff as well, but has rather successfully avoided guilt by association with hate groups. The company has climbed to higher moral ground merely by posting a disclaimer on its Web site.

“eBay recognizes that some older relics of organizations that promoted hate, violence or racial intolerance are legitimate collectible items that serve as a reminder of past injustices or horrors,” the statement reads. “Obviously, the past cannot be erased, and such relics can serve as important reminders and educational tools in a community that can learn from the past.”

It is okay to buy and sell offensive materials on eBay, the company seems to be saying, just so long as you include virtual sighs of regret and solemn head-shaking over the immorality of the ideas they represent.

Not eBay’s Department

eBay does not seem to place morality as a high priority in setting boundaries for its auctions, though. In June, reports surfaced that four New Jersey teenagers got sick from a drug they allegedly bought on eBay. The 17 year-old students were treated for vomiting and disorientation after taking a substance called dextromethorphane (DXM), which one of them reportedly purchased on eBay.

After the story broke, pressure mounted against eBay to take a more active role in overseeing the auctions on its site. However, some legal experts said that eBay should be no more obligated to police its auctions than the telephone company is obligated to monitor calls.

Those who want eBay to assume greater responsibility say this position is a cop-out, but eBay is apparently getting away with just a mild dose of criticism. So far there is no word of a lawsuit against the company over the incident, nor any indication that eBay plans to change its policies.

eBay Stands Alone

In a much-publicized dot-com “death watch” list released earlier this summer by Goldman Sachs analyst Anthony Noto, eBay is distinguished as the only profitable e-tailer among the 32 publicly traded companies evaluated. It looks very much as though eBay is doing something right.

Then again, one of those smart moves may involve eBay’s corporate agility in getting away with doing things wrong.