Ousted EBay Seller|Loses Antitrust Claims

(CN) - EBay did not violate anti-monopoly laws by dissuading its customers from doing business with each other outside of its site, a California appeals court ruled.

Lisa Genesta has been selling antique fabrics for 18 years through her company Ruins-CA, and she opened an account on the auction website eBay in 1999.

Misrepresentation concerns led eBay to suspend the seller's account for a week in 2008. Genesta said her competitors teamed together to discredit her business by filing unsubstantiated complaints about the authenticity of Ruins-CA products.

After a series of suspensions, eBay put Ruins-CA out of business in 2009 with a "permanent sales block."

In a federal complaint, Genesta and her company said eBay warned customers against buying products that are pulled and never reposted on the site.

They sued eBay for breach of contract, business interference, negligence, infliction of emotional distress and violation of the Sherman Antitrust Act. Competitors of Ruins-CA also face claims of anti-competitive behavior.

After facing down four amended complaints, eBay asked to court to block the plaintiffs' fifth claim without leave to amend.

An Orange County judge agreed, and the Santa Ana-based Fourth Appellate District affirmed last week with an unpublished opinion.

"Plaintiffs failed to sufficiently allege eBay engaged in conduct that violated the Sherman Act," Justice Richard Aronson wrote for a three-member panel. "Indeed, as plaintiffs acknowledged in the trial court, their fifth amended complaint made no reference to the elements of a Sherman Act violation."

Genesta and Ruins-CA also failed to define the relevant market as required to support an antitrust claim.

"In arguing eBay engaged in wrongful conduct, plaintiffs mischaracterize the tenor and content of eBay's alleged communications with their customers," Aronson wrote. "Specifically, plaintiffs characterize eBay's communications as 'threatening and intimidating,' and maintain they 'precluded buyers and sellers from dealing with each other outside of eBay.' But nothing in the communications eBay allegedly sent to plaintiffs' customers imposed such a stricture - or more important, threatened any consequences for its violation."

The plaintiffs had been represented by Joel Bennett.

EBay had been represented by Christopher Cox, Bruce Colbath, Mark Fiore and Greg Hull with the Manhattan-based firm Weil, Gotshal & Manges.

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