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DOJ begins eBay watch
February 4, 2000: 3:56 p.m. ET

Is Web auctioneer anti-competitive, or trying to protect its business?
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NEW YORK (CNNfn) - The Department of Justice is in the process of trying to determine if online auctioneer eBay is practicing anticompetitive measures by blocking aggregate auction listing sites from searching for listed eBay items.
    The Wall Street Journal reported Friday that the DOJ probe is in the preliminary stages and no official charges have been filed. The DOJ would not comment on the story.
    eBay (EBAY: Research, Estimates) issued a statement Friday, saying it thought the issues being examined by the DOJ were triggered by eBay's lawsuit with auctions listing company Bidder's Edge. eBay sued the latter company last December in U.S. District Court in San Jose, Calif. Calls to Bidder's Edge were not returned.
    "We have had some discussions with staff at the Justice Department regarding eBay and the online trading business generally," said eBay's senior intellectual property lawyer Jay Monahan in a statement. "We believe the contact with DOJ may have been prompted by auction listing aggregators, such as Bidder's Edge...our dispute with Bidder's Edge fundamentally is a commercial one that concerns eBay's right to prevent unauthorized trespassing into its computer system, can use eBay content in a manner which confuses and misleads eBay users."
    The controversy has been in the making for several months, and involves other sites such as Auction Watch. The sites use crawlers or robots, which sift through Internet sites and follow links from servers to find indexing information. The information is then listed on the sites for comparison purposes.
    For example, Auction Watch said that its universal search product combs through more than 300 sites to find items up for bid. It then organizes the information chronologically, allowing users to see how much time is remaining to bid for items.
    Auction Watch's vice president of marketing, Dan Neary, told that officials from the DOJ approached the company sometime during the past 2 weeks.
    "We were approached by the DOJ and had a conversation with them," Neary said. "While we can't go into the details or specifics, it did pertain to eBay and issues involving our universal search product."
    "We did not actively search them (the DOJ) out; they approached us," said Neary.
    Auction Watch launched its crawler in late September 1999, and in October was contacted by eBay, who said it did not want Auction Watch to search its site for listings. Neary said the companies tried to come to a compromise, but Auction Watch was not comfortable with eBay's terms of having the site completely eliminate eBay listings. Neary said Auction Watch customers complained, so the listings were reinstated.
    In November, eBay launched its technological defensive and was able to block Auction Watch from combing through its index using a crawler.
    At the time, Auction Watch CEO Rodrigo Sales said in a statement: "We are extremely disappointed that eBay has decided to build a wall around their marketplace and put their own interests ahead of its customers."
    In late January, Auction Watch found a way around eBay's blocking system and reinstated eBay listings on the Auction Watch site.
    "This is not so much about being anti-competitive as anti-consumer," said Auction Watch's Neary. "It about the Internet and has implications for e-commerce overall. The Internet is about freedom of information, to go out, search and find information." Back to top


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