Ebay Inc. Case

eBay is subject to the same foreign and domestic laws as other companies conducting business on and off the Internet (e10vk, pg 56). Currently however, there are few laws and regulations directed towards online services, mainly because little precedence exist. Therefore, online auctions are taking it upon themselves to self-regulate. eBay for instance took it upon themselves to ban hand guns, tobacco and alcohol products, and has tried to take a stand against music and video piracy on the web. With the increase use of the Internet the last several years states and foreign jurisdictions may attempt to impose regulations upon eBay or its users. The following are possible regulations that could become mandatory.

US regulations that could affect eBay include the Federal Reserve Board which governs banking, money transmission, and electronic funds transfer, at this time eBay's PayPal is not believed to fall under this regulation. PayPal is a platform that allows merchants and individuals to accept payments online. PayPal has received

written notices from state regulatory authorities saying that PayPal seems to constitute unauthorized banking business so PayPal has taken necessary steps to address these states' concerns. Increasingly, states have started enacting legislation regulating money transmitters. To date, PayPal has obtained license in 32 of these jurisdictions and interpretations in nine states that licensing is not required under their existing statutes. As a license money transmitter, PayPal is subject to bonding requirements, restrictions on its investment of customer funds, reporting requirements, and inspection by state regulatory agencies. Even though there have been no interpretations, PayPal has assumed that its service is subject to the Electronic Fund Transfer Act and Regulation E of the Federal Reserve Board. Therefore, PayPal must provide advance disclosure of changes to its service, follow specified error resolution procedures and absorb losses above $50 from transactions not authorized by the consumer. (e10vk, pg 54).

eBay is subject to regulation relating to consumer privacy. California, Minnesota, Utah, and Vermont have recently passed legislation that limits the uses of personal information gathered online or offline. However, the Fair and Accurate Credit Transactions Act of 2003 included a provision preempting conflicting state laws on the sharing of information between corporate affiliates, and as a result eBay believes that PayPal