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eBay, Yahoo nix auctions of personal data

Privacy concerns lead the two sites to shut down auctions that sought to sell a mailing list with the names, addresses and phone numbers of more than 200,000 active U.S. investors.

Privacy concerns have led eBay and Yahoo to shut down auctions that sought to sell a mailing list with the names, addresses and phone numbers of more than 200,000 active U.S. investors.

eBay said it shuttered the Market Logistics Group's auction twice last week, each time shortly after it was posted, because it violated the Web site's terms of use.

Yahoo also closed the auction of the same investor list for similar reasons last week, after noticing an unauthorized news release publicizing the sale from the 8-year-old direct marketing company.

"We don't allow bulk email lists to be sold on eBay," said Kevin Pursglove, a spokesman for the San Jose, Calif.-based auction giant. "First, there is a concern over privacy issues related to direct mailing lists. And more and more, people realize that these lists are the source of dinnertime aggravation."

Both sites' reactions mimic wider public sentiment against marketing practices that may violate consumers' privacy. Yahoo and eBay, like all businesses, depend on customer goodwill. And allowing the auction of personal information would be to commit brand suicide, consumer advocates say.

"Practices that have been going on for years offline--such as selling names and phone numbers--are now getting the attention of everyday people online, and they're not passing the smell test," said Jason Catlett, a privacy advocate with Junkbusters.

"eBay and Yahoo know people generally despise telemarketing, and they don't want to be tarred with the same brush as the telemarketers."

A high profile incident at America Online several years ago underscored consumer antipathy toward telemarketing practices. At the time, the online giant furtively changed its privacy policy to allow the sale of members' phone numbers to third-party marketers. Members got so incensed that AOL chief executive Steve Case apologized and changed the policy a few days later.

In the latest incident, Market Logistics was trying to sell a carefully culled mailing list of names and addresses of people looking for investment opportunities.

Michael Dambro, president of Market Logistics, said he read eBay's rules before listing the auction and found no potential conflicts. But after eBay pulled the auction the first time, Dambro said, he realized that one of eBay's reasons for pulling it was valid: He was asking interested buyers to call a toll-free number if they wanted to purchase further direct mailing lists.

Dambro re-listed the auction without the toll-free number Friday, but eBay yanked it a second time citing privacy concerns. Dambro said that eBay did not do enough investigation before it pulled the auction the second time.

"It's a knee-jerk reaction out of fear and ignorance," Dambro said. "We're made out to be such villains and we aren't. We're bringing value to the economy and the individual by allowing for targeted marketing."

In hindsight, Dambro added, the auction should have stayed within the industry.

Market Logistics listed the auction Tuesday on Yahoo, only to see it yanked by the company early Thursday.

Rich Godwin, a brand manager for Yahoo Auctions, said the company stopped the auction because it made a plea for interested buyers to contact the company directly, undercutting the natural bidding process on Yahoo. Godwin also said the auction violated the site's policy because it was selling personal information such as email addresses, phone numbers and mailing addresses.

"We know that people don't like spam email. We're not going to abuse the trust of our users, and we're not going to let others do that either," Godwin said.