eBay, Inc. (Nasdaq: EBAY) said it will get $1.2 million (US$) under a lawsuit settlement with ReverseAuction.com, Inc., which had been accused of illegally obtaining eBay user IDs and addresses in order to send them unwanted and misleading e-mail.
According to eBay, ReverseAuction “harvested eBay e-mail addresses and perpetrated a widespread spamming incident that outraged members of the eBay community.” eBay filed suit in January, and the U.S. Federal Trade Commission filed a separate complaint over the issue, which ReverseAuction also settled.
ReverseAuction operates an auction Web site, with prices of items for sale declining as items remain up for bid over time. Buyers can also post information about items they want to buy, with sellers competing to offer the lowest price.
E-mails Promoted Site
In its complaint, the FTC alleged that ReverseAuction obtained the information about eBay users by registering itself as an eBay user and agreeing to be bound by the terms of eBay’s user agreement.
After it obtained the names, the complaint said, ReverseAuction sent e-mails to eBay users telling them their user IDs were about to expire, and promoting ReverseAuction’s competing site.
“This is an important victory for Internet privacy,” said Jay Monahan, eBay’s associate general counsel for intellectual property. “ReverseAuction demonstrated a blatant disregard for the privacy of eBay users.”
“This settlement sends a clear message that eBay will not tolerate spamming, and that we will take the necessary steps to protect the privacy of our community,” said Monahan. The company said it plans to use a portion of the settlement funds for “further trust and safety initiatives focusing on user privacy.”
eBay Battles Bots
eBay is involved in a separate dispute over search “bots” with auction portal Bidder’s Edge. A federal judge recently issued a preliminary injunction barring Bidder’s Edge from searching eBay’s site for information about auctions.
eBay had accused Bidder’s Edge of trespassing when it sent automated search software into the eBay site. The robotic searches were harming eBay by slowing down site operations, the company charged. In granting eBay’s request for the injunction, U.S. District Court Judge Ronald Whyte said that eBay’s claims would likely succeed at trial.
eBay brought its suit against Bidder’s Edge last December after talks aimed at reaching a licensing agreement collapsed. Bidder’s Edge filed a counterclaim alleging that eBay’s practices were unfair.
The U.S. Justice Department has begun a preliminary investigation into whether eBay’s efforts to block price comparison search software are anti-competitive.