eBay plays hardball with feedback ratings

In a business where reputation counts, eBay is quietly moving to limit its sellers' bragging rights when they move to rival auction sites.

4 min read
In a business where reputation counts, eBay is quietly moving to limit its sellers' bragging rights when they move to rival auction sites.

At issue is the right to use eBay's so-called "feedback ratings," which are logged in as buyers and sellers rate their experience when doing a transaction on eBay. Transactions are ranked as positive, negative, or neutral, and those votes are turned into numerical ratings, which eBay uses to measure user satisfaction.

eBay claims these ratings are proprietary and cannot be cited on other person-to-person auction sites, a stance that underscores larger, controversial issues of who owns data on a Web site. Indeed, tiny, Toronto-based auction site eDeal is rebelling against the rule and continues to let users cite their eBay ratings on its site. The firm said it is openly defying what it calls an "ultimatum" from eBay's legal staff to stop.

Meanwhile, Yahoo Auctions quickly complied with eBay's demand earlier this spring.

High ratings are coveted by those who sell at online auction sites as they indicate a record of positive eBay transactions. Scores can run into the hundreds, and too many negative ratings can get buyers or sellers kicked off the eBay site.

"In the person-to-person market, reputation is extremely important," said Leon Kuperman, chief technology officer at eDeal, who said he hasn't heard from eBay since late April. "You may have a history of 100 completed transactions somewhere else, and you want to carry your own reputation to a new auction site. We see it as being the customer reputation that is protected."

eBay spokesman Kevin Pursglove said the company agrees that the ratings are important, but says the ratings belong to eBay, not the sellers, and should not be publicized on competing sites.

Earlier this year eBay added a new clause on feedback ratings to its user agreement that states: "Because feedback ratings are not designed for any purpose other than for facilitating trading for eBay users, we may suspend or terminate your account if you choose to market or promote your eBay feedback rating on any venue other than eBay."

That clause makes the ratings eBay's proprietary information and allows the company to control the "potential for abuse" if sellers begin to inflate their eBay ratings at other sites, Pursglove said.

But for eDeal, freedom to share information on the Net outranks all other arguments.

"We feel like it's almost a First Amendment issue," said eDeal's Kuperman. "The customer has done all that work to build a reputation, and we don't see why [the information] doesn't belong to the customer itself instead of eBay, which is just the venue."

Earlier this spring, Yahoo Auctions abruptly ended what it now calls "an experiment" over several days that allowed sellers to cite their eBay ratings in their Yahoo Auctions profiles. Yahoo declined to say whether eBay had contacted them.

But the question of who owns the data published on a Web site raises broader issues, which may indicate why Yahoo decided to drop its "import ratings" feature so quickly.

"There are some pretty big implications that go much beyond auctions," said Tim Brady, Yahoo's executive producer who oversees Yahoo Auctions, citing as an example software programs that allow individuals to move personal home pages created on one hosting site to another service.

"It's the user's time, the user's data, and it's your tools. So who owns that data?" Brady said. "We want to do what's right for the user, but...we need to be sensitive as to what precedents we're setting."

Similar issues have been tackled by Web publishers which objected when sites such as TotalNews "framed" copyrighted content from publishers, then sold advertising in those frames. The Washington Post, Washington Times Mirror, Time Warner, CNN, Dow Jones, and Reuters New Media sued TotalNews in February 1997, then settled the suit in June 1997 when TotalNews agreed to use hyperlinks rather than frames.

eDeal's Kuperman said his firm remained silent for six weeks about eBay's stance on feedback ratings because eDeal may propose a free clearinghouse that would collect ratings from all auction sites and post them at a central location. He estimates there are 10 general person-to-person auctions and another 40 niche sites.

A decision on that plan is expected by the end of June.

Yahoo's Brady thinks the idea may have merit, though he stopped short of endorsing it.

"From a user standpoint, the ability to carry your reputation around with you is awesome, and anything to facilitate that is a good thing," Brady said.