From Mark Veverka's "Plugged In" column in this week's Barron's:
Many an Internet bull has suggested that eBay is destined to be the next Microsoft, but little did they know that eBay could
follow in the steps of the software giant by becoming the next antitrust target of the federal government.
This seems to be the season for interesting nuggets buried in the filings of e-commerce concerns. In its latest 10-Q, filed this
month, eBay slipped some intriguing language regarding an ongoing "inquiry" by the Department of Justice into its "conduct with
respect to auction aggregators."
Ebay first disclosed in its 1999 10-K filed in March 2000 that the Department of Justice antitrust division had been poking
around. But in the most recent quarterly documents, the company added the following language:
"Third parties or governmental agencies may view our behavior as anti-competitive. Third parties have in the past and may in
the future allege that actions taken by us violate the antitrust or competition laws of the U.S or other countries, or otherwise
constitute unfair competition. Such claims typically are very expensive to defend, involve negative publicity and diversion of
management time and effort and could result in significant judgment against us, all of which would adversely affect us.
"Should the Department of Justice or any other antitrust agency open other investigations of our activities, we would likely be
harmed by negative publicity, the costs of the action, possible private antitrust lawsuits, the diversion of management time and
effort and penalties we might suffer if we ultimately were not to prevail."
Admittedly, we are not sure what it all means. But it sounds like eBay is bracing for lawsuits like residents of the Outer Banks
prepare for hurricanes. An eBay spokesman urged us not to read anything into the fortified disclosure other than the fact that it
is not uncommon for the company to update such language from quarter to quarter in anticipation of "challenges." |
