eBay and the Communciations Decency Act

Software and Information Industry [SIIA] has filed not one but, multiple lawsuits against eBay (EBAY) sellers for selling pirated software on the auction giant’s web site.

The total number of lawsuits filed against eBay sellers has climbed to twenty-five. While some of these lawsuits had been settled, it would appear as though SIIA is aggressively monitoring auction web sites and will continue to file lawsuits, as they identify sellers who pirate software and in turn offer up the product on sites such as eBay.

SIIA has estimated that the bulk of software offered on eBay is pirated software. As of this writing, a search on eBay for Adobe (ADBE) software yielded 2,791 results. A search for Adobe Photoshop returned 1,137 results. However, a search result under the keyword “software” returned a whopping 63,406 results. If SIIA is correct in estimating that over 90% of the software offered on eBay is pirated - SIIA will be filing lawsuits for some time to come. SIIA has settled a few of their lawsuits with great success. Adobe Photoshop costs approximately $700.00 to purchase through retail stores. Those claiming to offer the same product on eBay for $100.00 may be passing off versions of the popular software, which may be defective, without manuals and/or pirated. Software and Information Industry has stated it went to eBay with proposals to reduce the sale of pirated software on its site, however, rejected the proposals. The trade group also created a banner advertisement, which would serve to educate potential eBay buyers but, their advertisement was rejected.

While SIIA’s lawsuits are not aimed at eBay directly, Tiffany (TIF) took the bold step to sue eBay last year in a highly publicized legal battle in which Tiffany sued eBay over the sale of counterfeit Tiffany products. That lawsuit is pending a decision. In 1997, the FBI commenced Operation Bullpen. The goal - set up a phony company, wire undercover agents and purchase fake sports memorabilia from unwary forgers. The operation collected memorabilia purportedly signed by deceased celebrities such as Mickey Mantle and DiMaggio. The sale was these goods were conducted on eBay and other auction sites. Ultimately, the FBI’s investigation raised questions as to eBay’s responsibility for the sale of such merchandise on its web site. After a few years of legal wrangling, eBay was exonerated based upon the Communications Decency Act (under Rule 230). In short, the CDA immunized eBay from such claims. The Communications Decency Act:Exactly what is the Communications Decency Act? (source: Wikipedia)

The Act was Title V of the Telecommunications Act of 1996. It was introduced to the Senate Committee of Commerce, Science, and Transportation by Senators James Exon (D-NE) and Slade Gorton (R-WA) in 1995. The amendment that became the CDA was added to the Telecommunications Act in the Senate by an 84–16 vote on June 14, 1995.

As eventually passed by Congress, Title V affected the Internet (and online communications) in two significant ways. First, it attempted to regulate both indecency (when available to children) and obscenity in cyberspace.

Second, Section 230 of the Act, authored by Representatives Christopher Cox (R-CA) and Ron Wyden (D-OR), declared that operators of Internet services were not to be construed as publishers (and thus legally liable for the words of third parties who use their services). The most controversial portions of the Act were those relating to indecency on the Internet.

The relevant sections of the Act were introduced in response to fears that Internet pornography was on the rise. Indecency in TV and radio broadcasting had already been regulated by the Federal Communications Commission—broadcasting of offensive speech was restricted to certain hours of the day, when minors were supposedly least likely to be exposed. Violators could be fined and potentially lose their licenses. The internet, however, had only recently been opened to commercial interests by the 1992 amendment to the National Science Foundation Act and thus had not been taken into consideration by previous laws. The CDA, which affected the Internet and cable television, marked the first attempt to expand regulation to these new mass media. (source: Wikipedia)

It is Section 230 of the CDA that is most often used as a defense:

Section 230 of the Communications Decency Act was not part of the original Senate legislation, but was added in conference with the House, where it had been separately introduced by Representatives Chris Cox (R-CA) and Ron Wyden (D-OR) as the Internet Freedom and Family Empowerment Act and passed by a near-unanimous vote on the floor. It added protection for online service providers and users from action against them for the actions of others, stating in part that:

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

Effectively, this section immunizes ISPs and other service providers from torts committed by users over their systems, unless the provider fails to take action after actual notice or is itself involved in the process of creation or development of the content[1]. As a result of the Seigenthaler incident, and other incidents where individuals have been allegedly libeled by anonymous or judgment-proof parties, this section of the Act has come under fire, with numerous calls for revisions to the Act to restore service provider liability in some cases. Through the so-called Good Samaritan provision, this section also protects ISPs from liability for restricting access to certain material or giving others the technical means to restrict access to that material.

Conclusion

While lawsuits will continue to abound over the sale of counterfeit goods on the net, the venues, which offer the sale of such goods, can dodge potential actions under Rule 230 of the CDA. As funds are expended in the courts to bring the sellers of such goods to justice, it is Rule 230 which provides the loophole for the venues. The call to revise the Act could potentially remove the “empty chair syndrome” and place the venue (along with the seller) in the hot seat.

Disclosure: none

Comments

[mojowkn]

just to be clear, the CDA only provides immunity for state law claims, and expressly excludes protection for claims based upon intellectual property. For copyright claims, companies would have to rely upon the Digital Millennium Copyright Act. There presently is not statutory protection for trademark based liability, but we will see what the obligations are under common law when the Tiffany ruling is handed down.

[mojowkn]

just to be clear, the CDA only provides immunity for state law claims, and expressly excludes protection for claims based upon intellectual property. For copyright claims, companies would have to rely upon the Digital Millennium Copyright Act. There presently is not statutory protection for trademark based liability, but we will see what the obligations are under common law when the Tiffany ruling is handed down.

[JewelryBlogger]

"the CDA only provides immunity for state law claims"
Thank you for adding the comment! John

[AussieBattler]

Very informative article John , well done .
The sooner this act is revised the better , feebay has become a law unto itself , sellers need protection from this monster check why so many are leaving .
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