As part of the settlement, ReverseAuction agreed not to use software robots to scan eBay's site for email addresses and to refrain from spamming eBay users.
eBay sued ReverseAuction to protect the privacy of its members, said Jay Monahan, the company's senior intellectual property counsel. "We believed this was the right case to send a message. We're pleased to have it resolved and to move on."
ReverseAuction representatives did not immediately respond to calls.
Filed in January, the lawsuit alleged that ReverseAuction took part in misleading business practices and had gained unauthorized access to eBay's Web site. The dispute stemmed from a mass mailing ReverseAuction sent to several hundred thousand eBay members last November.
The Federal Trade Commission investigated ReverseAuction's actions last year and reached a settlement with the company in January. As part of that settlement, Washington, D.C.-based ReverseAuction agreed to stop any unlawful practices and to destroy any personal information gathered from eBay members.
ReverseAuction's agreement with the FTC did not include a monetary settlement. The site offers online auctions in which the price of an item falls until a buyer bids on the item. ReverseAuction is a small-time competitor to eBay, offering far fewer than 100 items for auction. eBay typically offers millions of items for auction at any one time.
eBay's settlement with ReverseAuction comes after the online auction giant's earnings report earlier this week. eBay beat earnings estimates by a penny a share, earning $11.6 million on $97.4 million in revenue.
Despite its settlement with ReverseAuction, eBay is embroiled in several other legal skirmishes, including a dispute with auction portal Bidder's Edge. Similar to the ReverseAuction settlement, in May, a federal judge issued an injunction against Burlington, Mass.-based Bidder's Edge, barring the company from using automated "bots" to search eBay for auction information.
But eBay has been under legal scrutiny of its own. In April, a group of sports collectors sued the San Jose, Calif.-based company, charging that it knew about but did little to stop auctions of fake sports memorabilia. In February, the Justice Department's antitrust division launched a preliminary investigation into eBay's dealings with Bidder's Edge and other auction portals.