eBay Sued for ‘Anticompetitive Behavior’

Auction portal Bidder’s Edge, Inc. filed an antitrust lawsuit against eBay, Inc. yesterday, alleging that the giant online auctioneer had attempted monopolization, interfered with contractual relations, and utilized unfair practices.

This legal action comes less than a week after the U.S. Justice Department began investigating eBay to determine whether its efforts to block price comparison search software from probing its Web site are anticompetitive.

Since the investigation by the department’s antitrust division is in a preliminary stage, there is no indication that formal action against eBay will be taken. Still, a team of investigators has already met with Bidder’s Edge, Inc. and AuctionWatch.com, two of the smaller auction sites that have been barred from eBay’s site.

Retaliatory Action

The Bidder’s Edge lawsuit, filed in U.S. District Court in San Jose, California, is a response to a December complaint filed by eBay.

The dispute is focused upon the growing use of “shopping bots,” which are used to comb various Web sites for the lowest price on a product or auction item.

As reported in the E-Commerce Times in December, eBay alleged that Bidder’s Edge software had trespassed on eBay’s system and that it had also committed computer fraud and misappropriation. eBay has also barred AuctionWatch.com and RubyLane.com from searching the nearly three million auction items on its site.

Since then, however, such similar services as AuctionRover.com have opted to sign a licensing agreement with the Palo Alto, California-based eBay.

Accuses eBay of Building Wall

Not only does Bidder’s Edge vigorously deny eBay’s allegations, it contends that the online auctioneer has no right to block admittance to its site.

“In addition to the legal issues involved, there’s a bigger issue we’re concerned with, and that’s the openness of the Web,” said James Carney, chief executive of Bidder’s Edge. “That openness is part of what makes the Web special, and why it has grown so explosively. eBay wants to build a wall around its site and maintain strict control over the person to person auction business, which it dominates. If allowed to prevail, eBay will set a precedent that could have potentially disastrous implications for every search engine on the Web.”

An eBay spokesman said that his company believes the suit to be without merit.

eBay’s Side

According to some analysts, companies that refuse to pay eBay a licensing fee for the right to search its site are little more than parasites.

Additionally, eBay — which has had its fair share of crashes — has pointed out that the millions of queries generated by multiple search engines could have the potential to slow down its site.

Nonetheless, the opposing auction sites contend that being cut off from eBay is tantamount to being cut off from 90 percent of the auction action — and that no one should be forced to pay for access to information on a Web site that is open to the public.

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