EBay Moves to Halt Indexing of Its Auctions by Outsiders
A dispute is escalating between online auction leader EBay and Web sites that search and display content from a range of online auctioneers that could have far-reaching effects on e-commerce.
The conflict could help determine how comparison shopping evolves and may influence disputes over who owns or controls user-created content on Web sites, say industry watchers and legal experts.
At issue is whether so-called auction aggregators, such as Bidder’s Edge and AuctionWatch.com, have the right to search EBay and display references to its auctions on their own sites. This process gives buyers an overview of the market, including listings from Amazon.com, Yahoo and many other sites, without having to laboriously visit each auction site. Experts consider such convenience essential as Web-shopping options grow exponentially.
James Carney, chief executive of Bidder’s Edge, argues that if EBay prevails in the disputes, other major e-commerce vendors would be encouraged to lock out aggregators, making comparison shopping increasingly impractical. “If you get a chain reaction with this, the Web could be a pretty nasty place, and users would get frustrated,” he said.
Bidder’s Edge voluntarily stopped indexing EBay in response to pressure from EBay but took its case to the auction market directly with a full-page ad in the New York Times on Thursday that encouraged sellers to also post their EBay auctions on Bidder’s Edge.
“EBay understandably feels that they have more to lose than they have to gain” by granting access to aggregator sites, said Barry Parr, an analyst with International Data Corp., based in Framingham, Mass. With about 3 million auctions online at any one time, EBay already controls about 70% of the consumer auction market, analysts say.
“EBay is special because they are not just a retailer; they connect buyers and sellers,” Parr said. “If AuctionWatch had the buyers, sellers would no longer have to go to EBay. AuctionWatch is capable of blowing apart EBay’s network, and it’s that network that gives EBay its muscle.”
EBay objects to its site being indexed for several reasons.
“We’re very much concerned that when the information is aggregated, it’s not accurately portrayed once it leaves EBay,” yielding an incomplete list of items, said Kevin Pursglove, an EBay spokesman.
A spot check of the search engines on different auction sites partly supported that claim. For example, a search for the term “Star Wars” yielded 12,590 items for sale on EBay, but only 715 from all auction sites searched by AuctionWatch.
But in a search for a much more obscure term, “Eric Ambler”--the late mystery writer--the tables turned. EBay listed only 13 relevant items, while AuctionWatch delivered 25 EBay items; the AuctionWatch search proved more comprehensive than EBay’s search of its own site.
EBay also says that the aggregator’s search tools can bog down its site’s performance and that they unfairly exploit EBay’s vast customer base.
Pursglove says that EBay informed AuctionWatch in writing Friday that it will take whatever measures it must--legal, technical or business--to stop the practice. So far, persuasion alone has worked with all sites except AuctionWatch.
“We’ve had conversations with AuctionWatch about developing ways in which they can gain access to our listings without compromising the integrity of our user experience,” including a possible licensing arrangement, Pursglove said, but no agreement has been reached.
Rodrigo Sales, chief executive of AuctionWatch, rejects EBay’s reasoning, adding, “One of the main reasons that we have not complied with EBay’s request is that my e-mail inbox is filled with messages from users supporting the service.”
Any legal action would ostensibly be based in part on EBay’s user agreement, which grants EBay a nonexclusive copyright on the information submitted by buyers and sellers; a recently added clause prohibits republishing, indexing or automatically monitoring the site’s information without EBay’s written permission.
EBay’s legal position, should it go to court, is far from solid, said Pamela Samuelson, professor of law and information management at UC Berkeley’s Boalt Hall School of Law.
“EBay doesn’t own a copyright interest in any of this,” Samuelson said.
Nor would EBay’s case be compelling under what’s known as a “compilation copyright,” which involves the unique editing or repackaging of content created by others, she added.
The body of law involving claims of unfair competition may present a more fruitful legal approach, said Jefferson Scher, a specialist in intellectual property with the Silicon Valley law firm Carr and Ferrell. In that case, EBay would have to demonstrate that AuctionWatch unfairly profits from the product of EBay’s labors.
“It would be a bad thing if all search engines and bots were shut down, though I don’t think a court would go that far,” Scher said.
Even if AuctionWatch backs down, the underlying conflict seems likely to continue as new tools for shoppers emerge. For example, Apple Computer’s new operating system, OS 9, contains auction-search abilities. Apple and EBay have begun discussions about the product, due for release later this month.
Aggregators argue that if EBay offers a superior experience, comparison buyers will continue to shop there.
EBay enjoys so dominant a position in its niche that it defies direct comparisons with other sites. Amazon, the largest Web merchant, does not block aggregators.
Still, some analysts fear that if EBay prevails, other large e-commerce sites might be tempted to follow suit.
“If EBay attempts to cordon off pieces of the Net that no one else can get to, a huge amount of the advantage that we all get from the Internet goes away,” Parr said. “To lock off parts of the Net ultimately hurts everyone.”
