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Created on Wednesday, 09 March 2011 04:52

Last Updated on Friday, 28 December 2012 19:00

Violating eBay's Code of Ethics - Illegal or Breach of Contract

So you happened to disobey their expectations when doing business on eBay. Tisk. Tisk. Tisk. Shame on you! And what are the consequences on your misconduct? Did you break a law and will be admonished with a fine or does this just constitute a breach of contract? OLG Hamm recently had a gavel falling opinion on December 21, 2010 (re 1-4 U 142/10).

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An internal eBay rule sets the rule that a supplier may only enter at most three offers for the same article, otherwise he will be overrepresented in search results and so exclude competitors. The legal question that the Higher Regional Court of Hamm had to decide was whether such rule is only a moral rule, i.e for fair play, or does this have the quality of a statutory rule against unfair competition that can be enforced in court?

The court held that eBay's conduct rules by themselves do not constitute any grounds for court enforcement - unless statutory rules have also been broken. eBay rules are not law but "only" contractual agreements. This is especially true because not the market in general but only the merchants on eBay are concerned. Since no statutory obligation has been disobeyed, unfair competition rules do not apply (§4 no. 11 UWG).

Just popping up in search results more than eBay wishes does not impose such threat to the market that real competition would be prevented. Therefore, any general suppression of competition does not exist that could be admonished as an impropriety re §3 I UWG, which incorporates a general rule against dishonesty in business transactions. This legal opinion might not seem persuasive. Trading on eBay is not a virtual mirror of the "analogous" economy. It is only one private, virtual market subject to contractual rules set out by eBay. This contractual set-up is subject to the statutes and law but is not itself a statutory order.