eBay faces DoJ antitrust investigation

The US Department of Justice (DoJ) has launched an antitrust investigation of the largest online auction site, eBay, to establish whether it is engaging in anti competitive behaviour.

The preliminary investigation focuses on eBay's alleged attempts to prevent smaller web companies from listing items on their sites that are being auctioned by eBay customers.

Such behaviour includes a federal lawsuit that eBay launched against one of its rivals, Bidder's Edge, in December. Ebay claimed that the company's software had trespassed onto its computers and alleged it had been involved in unfair business practices, computer fraud and misappropriation.

A team of investigators is currently examining the online auction market and has already met with Bidder's Edge and another small auction site, AuctionWatch.com.

Jay Monahan, eBay's senior intellectual property counsel, said: "We have had some discussions with the Justice Department regarding eBay and online auctions."

But he added that the dispute over access to his company's site "is a commercial one that concerns eBay's right to prevent unauthorised intrusions, not an antitrust issue".

The dispute centres on the growing use of "shopping bots" and "crawlers",which users send out to scan the Internet and search Web sites to find the lowest product price or the best bargain.

Such programs are used to index content, which is available on sites across the Web, and to gather information on the competition.

But eBay has blocked some software companies from accessing its web site and the DoJ is studying whether such a practice is anti competitive.

The company said, however, that it licenses access to some online "aggregators" that gather auction data, although it imposes some restrictions on how it is done.

But James Carney, Bidder's Edge's chief executive, who met with DoJ officials last month, said: "eBay is wrong both philosophically and legally."

The beauty of the Web was its openness and the ability to share information and eBay was erecting "artificial walls", he added.

A DoJ spokesperson declined to comment on the ongoing investigation.