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Justice Department to Investigate eBay

The Department of Justice Friday began an investigation of eBay Inc. to determine if the online auctioneer is breaking federal antitrust laws.

According to the Wall Street Journal, the investigation revolves around eBay's (EBAY) decision to block certain shopping bots and crawlers from accessing eBay information.

The company has prevented comparison shopping sites AuctionWatch.com, Inc. and Bidder's Edge, Inc. from accessing eBay's auction listings, leading the comparison services to work around the blocks with special programming.

An eBay spokesman said the company considers Bidder's Edge and AuctionWatch's actions to be "trespassing and stealing."

eBay filed a lawsuit against Bidder's Edge in December, charging that Bidder's Edge violates eBay's copyrights and intellectual property. That case is still pending. AuctionWatch said earlier this month in a published report that it wouldn't be surprised if eBay takes legal action against it as well.

eBay said it is not against aggregation of content, and has formed licensing agreements with other auction aggregators such as AuctionRover.com, Inc. The company stressed it is those firms which do not seek eBay's permission that it has blocked access.

The DoJ is investigating whether eBay's practice of blocking access to certain companies goes against current antitrust laws. The investigation is still preliminary stages, and there is no indication it will result in legal action against eBay, the Journal said.

James Carney, chief executive officer of Bidder's Edge, said news of the investigation puts some weight behind his company's battle with eBay.

"I think what it does is say is, 'where there's smoke there's fire, and maybe there are some issues there,'" he said. "I can't speak for the Department of Justice, but maybe not everything eBay does is great and. . .good for the consumer."

"This is eBay using their power in the market to try to restrain trade."