for the sale and distribution of illegal copies of sound recordings sold through its auction service,
alleging that eBay’s participation in the same constituted unfair competition under the California
Business and Professions Code § 17200 et seq. The court granted eBay’s motion for summary
judgment, holding that the CDA’s immunity provisions shielded eBay from liability under the
asserted state laws.
To establish immunity under the CDA, the court ruled that eBay had to establish the
following three elements: “(1) that eBay is an interactive computer services provider; (2) that
eBay is not an information content provider with respect to the disputed activity; and (3) that
plaintiff seeks to hold eBay liable for information originating with a third-party user of its
service.”^3012 The parties did not dispute the first element – that eBay was an interactive
computer services provider. The court ruled that eBay had established the second element
because it was undisputed that the descriptions of the goods and services auctioned over the
eBay service were created entirely by the sellers.^3013
With respect to the third element, the plaintiff argued that the suit did not seek to hold
eBay responsible for the publication of information provided by others, but rather for its own
participation in selling contraband musical recordings by virtue of its charging fees and
advertising for its services, providing insurance for all auctioned items, and providing escrow
and payment services.^3014 The court ruled that eBay’s role did not extend beyond the scope of
the federal immunity:
A principle objective of the immunity provision is to encourage commerce over
the Internet by ensuring that interactive computer service providers are not held
responsible for how third parties use their services. ... To accomplish this
objective, the immunity extends beyond the publication of harmful material over
the Internet, and encompasses the distribution of such material in transactions
effected over the Internet.^3015The court noted that, at bottom, the plaintiff’s contention was that eBay should be held
responsible for failing to monitor the products auctioned over its service when it must have
known that illicit recordings were being auctioned. The plaintiff argued that the very description
of some recordings (e.g., “bootleg” tapes) identified them as contraband, so that by failing to
intervene, eBay must be deemed to have knowingly joined in the unlawful sale.^3016 The court
rejected this argument:
Congress intended to remove any legal obligation of interactive computer service
providers to attempt to identify or monitor the sale of such products. While such(^3012) Id. at 1853.
(^3013) Id.
(^3014) Id. at 1853-54.
(^3015) Id. at 1854.
(^3016) Id.