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Jun 7, 2012 by |

Motion to Dismiss Denied in California Case Against EBay Corporation

On behalf of The Evans Law Firm on Thursday, June 7, 2012.


California Judge Denies Motion to Dismiss Tying Claims in Case against eBay Corporation

Last week, a Northern California district court issued an order in a putative class action case against eBay Corporation. The Plaintiffs in Smith v. eBay,represented by The Evans Law Firm and Macuga and Liddle, allege that eBay acts unlawfully in only allowing its customers to pay using PayPal, monopolizing online payment and auctioning, and charging unnecessarily high transaction fees.

Because eBay acquired PayPal in 2002, Plaintiffs further allege an improper tying of the two corporations. According to the Northern District Court, tying is “traditionally defined as ‘an agreement by a party [the buyer] to sell one product but only on the condition that the buyer also purchases a different (or tied) product…” The fact that eBay is a subsidiary of PayPal combined with eBay’s alleged bans on alternate forms of paying soon after the acquisition contributed to Plaintiff’s allegations that eBay committed illegal tying and bundling activities.

After hearing the Defendants’ Motion to Dismiss the Tying Claims from the Complaint, District Judge Jeffrey White held that the tying claims were in fact valid and should remain in the Complaint, thereby denying the Defendants’ motion. The Court held that because a “not insubstantial amount of commerce” would be affected by the alleged tying arrangement between eBay and PayPal, the allegations of a tying violation could remain.

The case is ongoing in the United States District Court Northern District of California, San Francisco division. The putative class action nature of this suit means that thousands of eBay users in California and across the nation could potentially be affected by the outcome. The Evans Law Firm has been retained as local counsel in this action. If you live in California and want to talk to a lawyer about these or other issues with eBay and PayPal, contact The Evans Law Firm by email at or call at 888-503-8267.

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