eBay Changing Membership Agreement: Two Issues You Should Be Aware Of

by , 9:10 AM EDT, April 3rd, 2001

We got a letter from eBay that many of you will also have received. It lets you know of upcoming changes in their membership agreements that will go into effect on May 15th of this year. One of those changes could be considered troublesome to some people. The eBay letter directed us to a FAQ on their site:

Frequently Asked Questions about the User Agreement Revision

What are the revisions?
A. The major revisions are described below. Please be aware that while we have summarized the major changes below, there are additional changes that are not summarized and therefore, you are encouraged to read the User Agreement at http://pages.ebay.com/help/community/png-user.html to see the full text of the revisions to the User Agreement.

Generally we made a number of small text changes to make sure the User Agreement applies to auction-style as well as fixed price selling. We also fixed some of the typos such as "who's" to "whose."

Membership Eligibility. We have made it more clear that users may not transfer their accounts or their feedback to other persons. The main concern is that your feedback is left for you based on your actions and that it would not accurately reflect the reputation and trustworthiness of someone else.

eBay is Only a Venue. We have clarified what an "Online Auction" is by adding a definition. We have not changed our stance, we are still just a venue.

Bidding and Buying. We made it more clear that you must be able to actually sell the item you are listing on our site whether you list in a fixed price or an auction-style format.

Arbitration. From time to time we have disputes that are filed in court rather than through arbitration as is required by the User Agreement. This is very costly to eBay and potentially to the user involved and we therefore added a cost provision.

General. We added an assignment provision, which means we could assign this relationship to another party.

Disclosures. We updated our address because we moved and also added some language clarifying where to report disputes.

That second to the last one could be an issue of contention with some people. Under "General," they are saying that if the company is bought by, or merges with, another company, your information will then become the property of the new company. We tracked down the specific information two layers deeper in the agreement:

Other Corporate Entities. We share much of our data, including personally identifiable information about you, with our subsidiaries and joint ventures that are committed to serving your online trading needs and related services, throughout the world. To the extent that these entities have access to your information, they will treat it at least as protectively as they treat information they obtain from their other users. Our subsidiaries and joint ventures follow privacy practices no less protective of all users than our practices described in this document, to the extent allowed by applicable law. It is possible that eBay, its subsidiaries, its joint ventures, or any combination of such, could merge with or be acquired by another business entity. Should such a combination occur, you should expect that eBay would share some or all of your information in order to continue to provide the service. You will receive notice of such event (to the extent it occurs) as provided in Section 11 ("Notice") and we will require that the new combined entity follow the practices disclosed in this Privacy Policy.

This paragraph says that eBay would make the new company agree to the same Privacy Policy that eBay will be following. For the record, that policy specifically says "As a matter of policy, we do not sell or rent any personally identifiable information about you to any third party."

Also note that this agreement forces members to settle their disputes with eBay through arbitration instead of the courts. This is becoming a common occurrence with many employee/membership contracts. Just last week, the Supreme Court ruled that such agreements were constitutional between employees and employers (something we thought would be a violation of First Amendment rights). This likely means that eBay's own clause will stand up to challenge.

There has also been some speculation that eBay is making this change in preparation for selling or merging the company. The company has reportedly, of course, denied this.

Members not wishing to agree to the new agreement can opt out by writing eBay at [email protected].

The Mac Observer Spin:

We aren't attorneys, and we never even played one on TV or the stage. That said, this change actually seems pretty straight-up. Where it could become a big nasty issue would be if eBay went into receivership (not likely, but always a possibility), or some other big ownership change, and the new owners decided the best way to get their money back would be to auction off eBay's enormous database of highly targeted personal information and stats to the highest bidder. This happened recently with a failed dot.com that did just that, sold off their database of personal information despite having pledged to never, ever do this. Fortunately for privacy-minded eBayers, eBay is on solid financial footing. Still, you never know.