E-bay and Database Protection

Aybey Boran

E-Bay and Database Protection

1. How important to eBay is the protection of its database from auction aggregators and other search engines? In what ways do auction aggregators harm eBay?

Ebay being the leader in online auction is entirely dependent upon online auction activities. Therefore, its database is its most valuable and precious asset. The information gathered by eBay from its online auction is its main source of success. This information is later integrated with other internet service providers. eBay auction being unique due to its convenience of use and other features such as serving as a largest online bidding site. An estimated of 15.8 million users are registered with its site. To protect such a large flow of online bidders it is must of it to protect itself from its data being copied and used by other auction aggregators. Database collected by eBay is due to its sole efforts, whereas the data used by auction aggregators is the one that is either copied or their users being diverted to eBay site once the search doesn’t show the required items or category on their respective websites. All these actions by aggregators not only undermine eBay efforts but also can also endanger its patent and its uniqueness as the only site to offer 4320 categories.

2. What strategies should eBay adopt to protect its intellectual property?

So far the efforts made by eBay faced resistance due to incomplete Intellectual property laws and insufficient provisions in them. For example, according to CADP which is The Coalition against Database Piracy, “copyright laws only protects database to the extent that it is creative in the selection, arrangement or coordination of the facts. Copyright law doesn’t protect factual database from thievery.” Keeping in view such complications in copyright law the protection of its database from aggregators becomes very difficult. EBay used a very effective strategy by lobbying and legislating through policymakers and helping it bring its case to Washington and Congress, still the opposition to its cause and protection affected its purpose of stopping the data from being copied and used unfairly.

In the view of all these events, there isn’t much eBay can do to stop its data from being pirated or stolen. EBay’s’ strategy for working with auction aggregators is the best solution to this problem so far in which, for a small fee the aggregators were allowed to use its database but not copy it. Bidder’s Edge so far is the biggest pirate of eBay’s data. Some of the ways that eBay considered using was to establish intellectual property rights through courts to the data it generated from its websites or to use Computer Fraud and Abuse Act. Another option considered by it was to seek a preliminary injunction against Bidder’s Edge and other aggregators. But it realized that all these strategies are costly, time consuming and could divert attention of government and other related agencies toward its business and would affect it severely. It is difficult for eBay to come up with a perfect solution to this problem.

3. Should Ebay take legal action against Bidder’s Edge, if so on what grounds should it file?

Since eBay had different options for taking legal action against Bidder’s Edge. The basic grounds on which it could file a case against it had already been weighed and thought-over by eBay. One of the grounds was to establish through courts Intellectual and property rights but The Feist decision was the major obstacle in it. Another one was to use Computer Fraud and Abuse Act. Also it could seek a permanent injunction against it. But by doing all these things, it would jeopardize its own position. Government agencies could come after it due it size and its status as the largest online auction site. Government could raise issues of unfair business practices, the exercise of market power and use of courts to stifle competition. Therefore, whatever step it considers taking, it should always beware of the consequences of such actions.

4. Should eBay use technology to thwart the aggregators?

This sure is the best option for eBay besides all the legal actions it considered taking earlier. But there hasn’t been any such technology that would thwart aggregators. There was an option of using firewalls to stop its data from being stolen but it would also cause inconvenience to its users as well. This would fuel a race against overcoming those hurdles. Presently, the biggest aggregator against eBay, Bidder’s Edge was already using a robotic program to copy 80,000 pages every day. It is understood that the information it copied was obsolete but it for Bidder’s Edge it was serving the purpose.

5.What are the possible consequences for the Internet and electronic commerce of H.R.354 and H. R. 1858?

There are some upsides and downsides of both H.R. 354 and H.R. 1858. If H.R. 354 is enacted it would cause problems for a lot of online companies. For example, Yahoo, one of the biggest online stock analysis site would be impacted due to its inability to update the information periodically. The main opponents of H.R. 1858 were those in Commerce, who argued that this legislation would stifle the Commerce since it is dependent upon the information gathered from various sources. Search engines would specifically be impacted by H.R.354. Yahoo argues that although it does a great effort to gather information, disseminating such information is crucial to its business. The biggest fear among people opposing H.R. 354 was the monopolization of databases. Bidder’s Edge compares its position to that of Yahoo and Msn who it thinks are doing the same job. According to the provisions of this bill, the bill provides substantial protection to database companies and levies severe penalties for violating it.

H.R. 1858 on the contrary protects the users interests. It prohibited the copying of the data produced by database companies and selling of such database for the purpose of competition of other database. This bill was supported by companies such as Yahoo, American online, etc. Since most of these companies business was directly dependent upon the information they gathered and provided to their users, they strongly supported it. According to CADP, “H.R. 1858 only bars the thefts that result for duplicative processes”.

6. What specifically should eBay do to move H.R. 354 to move it through the House? Should it attempt to mobilize eBay community in support of H.R. 354?

CADP already did the job of releasing a public opinion in favor of H.R. 354. As it is discussed earlier that eBay involvement into this matter directly could jeopardize its position in the eyes of government and other related institutions so it should avoid being too prominent. Of course, public opinion matters a lot to policymakers but it still would again raise the issue of monopolizing the market. The approach that eBay adopted by collectively opposing the issue of database piracy is the best approach. As far as moving H.R. 354 through House is concerned, this effort had already been made and didn’t turn out to be too effective. Since H.R. 1858 was also introduced to counterbalance H.R. 354 its effectiveness was reduced. Net Coalition and other major online commerce industries backing H.R. 354 would make it extremely difficult for eBay to enact this bill. The best way for eBay is to wait and to try to gain more support from other online industries whose business is directly related or dependent upon such database businesses. Businesses such as NAR, National Association of Realtors, which favoured H.R. 354 and opposed the database piracy are a good example of such a effort. In order for eBay to move this bill through the House it would need more support from other database companies, its online users’ opinion matters a lot too but in order for its proposal to be effective it would need a joint effort by all its supporters specifically companies.

7. Would enactment of H.R. 354 establish monopoly rights to information and limit the availability of information to Internet Users?

H.R. 354 would not completely impair the usage of internet. Of course there will still be information available to other users but only some users such stock analysis companies will be at disadvantage. If there is some middle ground found on this issue, it can solve the problem for both database industries and internet users. The companies opposing this bill are basically the ones that have a fear of losing the information available to their users through internet. Database companies can gain an advantage or monopolize such markets as stocks and stuff. But since the motive of eBay is to stop the business that is already in the same field to copy the data compiled and collected by it, it wouldn’t have a too much damaging effect on the normal users.