eBay feedback, the post-transaction commentary that buyers and
sellers use to build their reputations on the auction site, is at the
center of a libel lawsuit filed earlier this week.
Yesterday, Washington, D.C.-based FedTrust filed suit in federal court
against Specialty Car Sales of Miami, alleging that the owners and employees of
Specialty posted two messages about a FedTrust manager, James Glynn, through eBay's feedback system. FedTrust claims
that the posted commentary resulted in lost sales of more than $75,000 after
bidders backed out of FedTrust auctions.
FedTrust operates a regional distribution center in Miami and considers
Specialty Car Sales to be a competitor there. The lawsuit alleges that the
messages were left by David Talarico Jr., a business partner of Specialty
Car Sales; owner Adam Yunis; and by New York City resident Martha Castillo.
Blackstone said that Castillo bid on several items placed up for
auction by Yunis and said he suspects a deeper connection between the two.
"They had to know each other," said Glynn's lawyer, Franklin Blackstone of
Arter & Hadden.
The comments posted on eBay, supposedly left by Talarico and Castillo, warned potential
buyers about Glynn, FedTrust's Miami-based manager. One said that Glynn was
"Very secretive--dishonest about origin of his cars, stay away," and the other
read, "Would not disclose source of cars--low life liar I have carfax [a vehicle-history tracing service]."
Contacted by CNET News.com, Yunis said he had not posted the messages, but it
was possible that some of his employees or associates could have. Yunis said he
has had negative dealings with Glynn and had emailed Glynn directly.
Referring to the postings, he said, "There's nothing there that seems
libelous to me. It's all true."
After being contacted by Blackstone, eBay suspended the two users who left the
negative messages. However, the auction site has not removed the messages from
Glynn's feedback record.
"We're not the ones that determine whether statements made on there might
be libelous," said eBay spokesman Kevin Pursglove. In a similar case on eBay
last year, he
added, "the plaintiff made her case before a judge and only then did we
remove the offending language from the feedback forum."
FedTrust hasn't yet named eBay as a defendant, but Blackstone said he may
add the firm to the lawsuit. Blackstone said he didn't name the company
initially because he thought it might be protected by a provision of the
Communications Decency Act that shields Internet service providers from
being sued over messages placed by their users. However, Blackstone has asked
eBay to remove the negative feedback.
"If they've suspended the user IDs, they should remove the statements of
the people," Blackstone said.
But eBay's Pursglove said the users were suspended because they violated the
user agreement by emailing bidders during an open auction, not because of the
content of their feedback. And eBay won't remove the feedback until a court
orders it to do so, he added.
Rich Gray, an attorney with
San Jose law firm Bergeson, Eliopoulos,
Grady & Gray, said eBay's failure to remove the messages could open the
company up to a suit by FedTrust.
agreement forbids "actions which may undermine the integrity of the
feedback system" and gives eBay the right to delete any information users
place on the site. That agreement is essentially a contract
between eBay and its buyers and sellers, Gray said.
"If the feedback undermines the integrity of the feedback system, you've
breached the user agreement with eBay by posting it," Gray said. "[eBay]
has the right and the duty to remove it. They're playing with fire."