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The eBay PayPal Monopoly Class Action Lawsuit case is Charlotte Smith, et al. v. eBay Corporation, et al., Case No. 10-cv-03825 JSW, U.S. District Court, Northern District of California.
eBay Must Defend PayPal Monopoly Class Action Lawsuit
By Matt O’Donnell
A federal judge has refused to dismiss a class action lawsuit alleging eBay monopolized the market for payment systems used in online auctions.
The eBay antitrust class action lawsuit claims the auction site raised fees and shut out payment-system competitors after acquiring PayPal in 2002, and then forced sellers to use PayPal by making it the only viable option.
As a result, sellers had no choice but to pay fees to eBay both for listing and selling their products and for using PayPal, the class action lawsuit says. If sellers use a payment method other than PayPal, eBay removes their listing.
The class tied the monopolization claims to the continued modification of eBay’s accepted payment policy, which prohibited payments through Google Checkout in 2006, doubled PayPal Buyer Protection in 2007 (which allegedly eliminated buyer protection for non-PayPal transactions), and required sellers to accept electronic payments in 2008.
eBay moved to dismiss the claims that the alleged tying between eBay and PayPal harmed competitors, but U.S. District Judge James White denied their motion last week.
Judge White ruled that the alleged tying arrangements could have had a significant effect on commerce, and the Plaintiffs’ facts “cross the line from possible to plausible.”
Judge White also denied eBay’s motion to strike paragraphs about its acquisition of PayPal in 2002 and of VeriSign in 2005.
The class action lawsuit claims the disputed paragraphs “demonstrate the historical progression of the eBay/PayPal business empire, a necessity for later proofs.”
“Although Plaintiffs do not explain what these later proofs might be, on this record, the Court cannot say that the allegations have no possible bearing on the issues in this litigation,” Judge White wrote.
Updated June 6th, 2012
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