eBay's Evolution: Structural Growth Toppled By A Crumbling Foundation?

Three key attractive attributes of my job are, in no particular order:

• The cool new technologies, and products based on those technologies, that I regularly learn about and often even get a chance to test-drive for myself
• The conversations I have with the incredibly smart people who invent and implement these technologies and products, and
• As I’ve mentioned before, my intimate access to, and therefore ability to analyze and critique, companies’ ever-developing business strategies.

To wit, I’ve been an interested observer of eBay’s evolution in recent months, both as an professional industry spectator and as a frequent personal user of the service (mostly to sell stuff, but occasionally also to buy). In striving to satisfy shareholders’ expectations for ever-increasing revenue and profitability, eBay has recently made some ‘interesting’ moves:

• An (unsuccessful) attempt to only allow eBayers to use PayPal (which eBay conveniently also owns) as the payment processing medium,
• Steadily increasing the auction insertion and final-value fees charged to sellers, as Paul Rako pointed out earlier this year, and
• Partnering with large merchants to the detriment of individual sellers, and more generally encouraging fixed-price sales instead of auctions.

As encouragement for more potential buyers to populate eBay, but in the process further distressing sellers such as myself, the company in May also began preventing sellers from leaving neutral or negative feedback on buyers in response to transactions gone awry:

eBay’s reason for the move was "intriguing" (along with other adjectives):

Today, the biggest issue with the system is that buyers are more afraid than ever to leave honest, accurate feedback because of the threat of retaliation. In fact, when buyers have a bad experience on eBay, the final straw for many of them is getting a negative feedback, especially of a retaliatory nature.

And eBay’s attempts to mollify sellers’ concerns, as described by Ars Technica:

eBay will initiate a handful of seller protections to offset the inability to speak ill of a buyer. Negative and neutral feedback will be removed if a buyer bails on a transaction or if the buyer has his or her account suspended. Buyers will have less time to leave feedback, and won’t be able to do so until three days after the auction ends. eBay is also pledging to step up monitoring and enforcement of its policies around buyers who behave "very badly."

were coolly received.

I’ve run into even more eBay frustration over the past month, notably with a distinct ‘assume upfront that the seller’s at fault’ flavor. As part of my continued de-materialism process, I decided in early August to sell some still-shrinkwrapped software that was taking up storage space. Note that I hadn’t even opened up the boxes yet, therefore hadn’t seen the End User License Agreement, and therefore was free to resell the products regardless of what the EULA said. And even if I had broken the seal, these particular software packages allowed for post-license transfer from one party to another.

A few days after the auctions began, I received a disturbing series of emails from Ebay:

The listing was removed because it violated eBay policy. We notified members who placed bids on the item that the listing has been canceled.

The rights owner, BSA (Business Software Alliance) (US), notified eBay that this listing violates intellectual property rights. When eBay receives a report of this type of violation, we remove the listing to comply with the law.

Copyright infringement is unlawful and against eBay’s policies. Copyright is the protection provided by law to the authors of creative works, such as movies, music, software, photographs and books, both published and unpublished. Copyright owners possess the exclusive right to reproduce the copyrighted work, to distribute copies of the copyrighted work, and to perform or display the copyrighted work publicly.

eBay prohibits the listing of unauthorized copies of copyrighted works. Unauthorized copies include (but are not limited to) backup, pirated, duplicated, or bootlegged copies.

Guideline: If the product you are selling is a copy of another work that you aren’t authorized to copy, don’t list the item. Selling unauthorized copies of copyrighted material is a copyright infringement and is not permitted on eBay.

For more information visit the following Help page:

http://pages.ebay.com/help/policies/replica-counterfeit.html

To take the intellectual property tutorial, please visit:

http://pages.ebay.com/help/tutorial/verotutorial/intro.html

Please be aware that any additional violations of this policy may result in the suspension of your account. eBay understands that you may be concerned about this situation. We encourage you to contact BSA (Business Software Alliance) (US) directly if you have any questions.

You can send an email to: auction-abuse@bsa.org

For more information on how eBay protects Intellectual Property, or for additional information if you believe that your listing has been removed as a result of an error or misidentification, please visit the following Help page:

http://pages.ebay.com/help/tp/programs-vero-ov.html

For more information on why eBay may remove a listing, please visit:

http://pages.ebay.com/help/tp/listing-ended.html

Please be assured that your listings have not been targeted in any way. Although there may be similar items currently listed on eBay, we review all listings that are reported to us by eBay members or Verified Rights Owner (VeRO) program participants. We rely on reports from our members to help maintain the safety and security of our Community. We encourage you to report any items by using the REPORT THIS ITEM button on the listing so we can quickly remove any other items that should be removed.

Thank you for your understanding.

Sincerely,

eBay Trust & Safety

Whaaa…???

Continue reading with Part 2, ‘eBay’s Apprehension: A Situation Ripe For Exploitation‘…