U.S. sues eBay over sale of harmful products

NEW YORK, Sept 27 (Reuters) - The U.S. government on Wednesday sued eBay (EBAY.O), accusing the online platform of violating the Clean Air Act and other environmental laws by allowing the sale of several harmful products, including devices that defeat automobile pollution controls.

EBay could face billions of dollars in penalties, including up to $5,580 for each Clean Air Act violation, according to the government’s complaint filed in the federal court in Brooklyn, New York.

The Department of Justice said eBay illegally allowed the sale of at least 343,011 aftermarket “defeat” devices that help vehicles generate more power and get better fuel economy by evading emissions controls.

EBay was also accused of allowing the sale of at least 23,000 unregistered, misbranded or restricted-use pesticides, violating a 2020 “stop sale” order from the U.S. Environmental Protection Agency.

The San Jose, California-based company also allegedly distributed 5,614 paint and coating removal products containing methylene chloride, a potentially lethal chemical linked to brain and liver cancer and non-Hodgkin lymphoma.

“EBay has the power, the authority, and the resources to stop the sale of these illegal, harmful products on its website,” the complaint said. “It has chosen not to; instead, it has chosen to engage in these illegal transactions.”

In a statement, eBay called the lawsuit “entirely unprecedented” and said it would defend itself vigorously.

“Maintaining a safe and trusted marketplace for our global community of sellers and buyers is a fundamental principle of our business,” it said. “Indeed, eBay is blocking and removing more than 99.9% of the listings for the products cited by the DOJ, including millions of listings each year.”

EBay shares were down 1.6% at $42.79 in late morning trading.

Reporting by Jonathan Stempel in New York; Editing by Sharon Singleton and Bill Berkro

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This is why the FTC/DOJ keep losing cases, they file these baseless lawsuits.
20 - 30K transactions that got overlooked is literally nothing. Like ebay said, they block millions of listings every year and they have the records to back that up. They’re just trying to make marketplaces fully liable for anything their sellers do, which would be really bad precedent.

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Several weeks back sellers reported on the Ebay forum that their listings for auto exhaust system parts were taken down as aftermarket “defeat devices”.

Apparently they are taking the Amazon approach to compliance.

I doubt the lawsuit was the reason for the stock drop.

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I don’t entirely agree. This whole turning a blind eye to blatant criminal behavior is absurd. Ebay is like backpage/craigslist and enabled the criminal activity like prostitution and sex trafficking…

https://www.ebay.com/itm/266427860228

If the problem was not so significant, why delete whole chunks of the catalog? BillionS divided by $5,580 is at least 300,000 offerings. Not a “Whoopsie, we missed these”.

Imagine all the unregulated imported items that flew under the radar.

What I’m saying is ebay ISN’T ignoring the problem. They remove millions of violations. They shouldn’t be held liable for the ones that do slip through (as they’re doing their due diligence) as it’s impossible to catch every single violation before they occur

:thinking: Where are you getting “20-30k overlooked transactions”?

It’s more like at least 370k.

And 23k of those were after a 2020 stop sale order.


Precedent?

In my region, we have nuisance laws. The bar or club or gas station where violence, drug deals, robberies, illegal gambling, and/or trafficking repeatedly occur might not be the instigator of the issue, but they are the facilitator. They get shut down for not providing the requisite proportional safety measures and oversight that would reduce the number of emergency response calls from that location.

Nationally, there are some significant lawsuits related to sexual abuse and sexual assault perpetrated by athletic department employees and contracted coaches against universities and cheer gyms. The facilities and institutions did not commit the systematic and intentional crimes themselves, but they facilitated access and failed to provide the requisite proportional oversight and safety measures needed to prevent and detect not only the first crime but all subsequent crimes committed by those under their supervision and management.

There’s already strong precedent for holding a venue accountable for patron, vendor, and supervisee behaviors that it allows and shields.


:roll_eyes: And no, “they” are certainly not trying to make “marketplaces fully liable for anything their sellers do”. They are holding the marketplace responsible for egregious lack of safety measures and oversight. Just like local authorities hold landlords responsible for some but not all of the crimes and violations of their tenants.

Holding more than one entity accountable for their various roles in a bad thing does not diminish the culpability of any individual entity in that bad thing.

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Oh, I only saw the pesticide and paint coating products numbers, I didn’t see the 343K defeat devices.

That is quite a lot.

But if ebay is legitimately removing 99.9% of the offending listings like they claim, then IMO they’re doing their job. The problem is AI/bot filters can only do so much, once people get creative about bypassing those filters, the site has to react to complaints/reports about those listings in order to manually review and take them down.

Has the US government filed any complaints about listings that were ignored? They obviously did the work of scanning all the listings for violations, did they bother pointing any of them out to ebay? If they did and ebay ignored those complaints, that’s a different story.

Why is it the government’s job to do this for a business?

The law is the warning.

You certainly did not give Amazon this level of benefit of the doubt, for things like invoice data usage LOL. :thinking: :smile:

Ignored, probably not. Allowed them in another form or another listing format, probably.

Like everything else, I would like to see the facts over any of our collective speculation.

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There are also various safe harbor laws for marketplaces where they’re not liable for certain things if they have certain safeguards in place. I don’t know how or if they apply to these types of products, but I know they apply broadly to IP infringement as long as rights owners have the ability to have the content taken down in a reasonable amount of time.

Ok…so why even mention them?

I’m guessing that the DOJ lawyers are probably aware of if or how these would apply in this specific case, or that a judge will remind them PDQ.

And nothing in this case at this time is about IP, so…???

The argument could be that they didn’t act sufficiently to be protected.

This lawsuit, like many other regulatory lawsuits is attempting to change the law.

Ebay, Amazon, Walmart, Facebook, X, and other sites are protected against legal liability for violations they are unaware of.

The congress has not been able to agree on any further limitation of their immunity.

The governments regulators have lost many cases recently where they attempted to rewrite the law, and will probably lose more during this years Supreme Court session. (You can read about the weakening of the Chevron decision if you want to).

On the Ebay forum, there was some discussion about the chemicals and pesticides, Some of the posters bemoaned their ban, because they are highly effective at what they claim to do.

Since I sell nothing that proports to be useful, I am simply an observer in this dispute. Of course, I have a political opinion (which will be shared in an appropriate venue).

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This is actually a key point.

Amazon is MADE aware of most of it’s violations, they either fail to act or no one reads those mailboxes anymore. I’m sure eBay is also made “Aware” of most violations.

This will be the key to this case

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