The ongoing battle between eBay Inc. and auction aggregators has transcended beyond the auction space and calls into question a more important issue — does an open Web site has the right to block search engines from accessing it?
A wide range of companies has sprouted in the past year, using comparison technology to aggregate auctions going on throughout cyberspace. These aggregators simultaneously search hundreds of auctions with crawler technology to find the best auctions for a specific item. The sites also provide reviews of auction sites and tools for sellers to post listings on certain auction sites.
AuctionWatch Inc. and Bidder’s Edge, Inc. are considered leaders in this space, and have garnered the most press, mainly because of their fights with eBay (EBAY). The two companies continue to search eBay content, even after eBay
requested they cease from searching its site in November. Bidder’s Edge has already been slapped with a lawsuit from eBay because of the practice, and many expect the same fate for AuctionWatch, which has employed proprietary technology to get around an eBay server block.
When eBay decided to block certain auction aggregators from searching its content, it did so in order to keep them from “trespassing” on its site. The company stated that the searches were an “unauthorized intrusion” and that they place an unnecessary load on eBay servers. eBay also considers it a violation of intellectual property rights and said that the aggregators may mislead users by not returning the full results of some eBay searches.
“They’re essentially engaging in cyber-trespassing,” said Kevin Pursglove, an eBay spokesman. “They are trespassing on our site and the information is being gathered illegally.”
But both AuctionWatch and Bidder’s Edge said they merely are accessing
content from an open Web site, just like any individual, or search engine like Yahoo! (YHOO), AltaVista or Lycos (LCOS).
“If eBay is allowed to build a blockade around content, then other searches
such as Yahoo! or Google could be next,”
said Dan Neary, vice president of marketing for AuctionWatch. “It’s not as much an issue between eBay and AuctionWatch as it is an issue for the whole Internet. “If eBay is able to put up walls around information, then it will affect a lot of other companies.”
James Carney, chief executive officer of Bidder’s Edge, agreed.
“The issue is about the flow of information,” he said. “Yahoo! doesn’t have permission to search other people’s sites.” If eBay succeeds in keeping certain visitors out, Carney added that “this could stifle consumer services that are provided using search technology. Should this go to trial, I believe it will be a landmark case.”
Pursglove said the issue is more complicated than a simple search. He contends that many companies have code within their servers barring search engines access to certain information, though did not specifically say whether eBay partook in that practice.
The legal aspects of eBay’s suit against Bidder’s Edge are on shaky ground, according to Rich Gray, an antitrust lawyer with Outside General Counsel of Silicon Valley.
He said eBay’s content could be considered “factual information,”
which is not entitled to copyright protection.
As far as the unauthorized intrusion claim, Gray noted that “anyone who leaves their site open to the world better have a good reason for blocking people. . . .I hav
e a hard time trying to justify stopping select companies
from accessing their information. But if those sites are sinking their
servers, then it could be a legitimate claim.”
eBay does have licensing agreements with smaller auction aggregators such as Auction Rover and iTrack.com, though it could not come to agreements with AuctionWatch and Bidder’s Edge. At issue, said the aggregators, was eBay’s insistence to be segregated from the other auctions.
“eBay wanted to segregate its data from everybody else’s,” said Carney of Bidder’s Edge. “They clearly wanted to be set aside. If we segregate data, then our business model is pointless. It would hurt functionality and the
user experience.”
Pursglove said the segregation issue is a myth purported by the aggregators after Auction Rover decided to separate eBay content from others.
“Segregation of content was not part of our user agreement with Auction Rover,” he said.
Carney defended his service by saying that auction aggregators are not competing with eBay; they in fact drive more traffic to auction Web sites. Neither aggregator has had any problems with any of the other auctions they search. Both companies say auctions such as Yahoo! and Amazon.com, Inc. (AMZN)
have been very supportive of the their services.
This battle has expanded beyond the auction space to include the federal
government. Last week it was reported that the Department of Justice’s antitrust division is
looking into, though not formally investigating, eBay’s practices. Bidder’s
Edge has chosen to fight back as well by filing a counterclaim earlier this
week, charging eBay with antitrust violations.
“What’s enabled the Web to grow so quickly is free flow of information,”
Carney said. “eBay’s protective nature is the last thing the Web needs for consumers to find what they’re looking for. If that were so, everyone would build their own fiefdoms. That’s not what we need.”
