EBay wins dismissal of US lawsuit over sale of harmful products

4:49 pm Monday, September 30th, 2024

By Jonathan Stempel

NEW YORK (Reuters) -A federal judge dismissed a U.S. Department of Justice lawsuit accusing eBay of violating environmental laws by allowing the sale of hundreds of thousands of harmful products on its platform, including pesticides and devices to evade motor vehicle pollution controls.

U.S. District Judge Orelia Merchant in Brooklyn ruled on Monday that Section 230 of the federal Communications Decency Act, which protects online platforms from liability over user content, shielded eBay from liability in the civil lawsuit.

The judge said eBay’s administrative and technical support to sellers “does not materially contribute to the products’ alleged unlawfulness” and does not make the San Jose, California, company a “publisher or speaker” on sellers’ behalf.

Merchant also said eBay was not a “seller” of some of the challenged products, because it did not physically possess them or hold title. She rejected the government’s argument that eBay was a seller because it exchanged the products for money.

The Justice Department declined to comment.

EBay said maintaining a “safe and trusted marketplace” was fundamental to its business, and said it would continue to invest significant resources to prevent prohibited items from being sold on its platform.

In its Sept. 2023 complaint, the Justice Department accused eBay of illegally allowing the sale of more than 343,000 aftermarket “defeat” devices that help vehicles generate more power and get better fuel economy by evading emissions controls.

The company also was accused of allowing sales of 23,000 unregistered, misbranded or restricted-use pesticides.

EBay also allegedly distributed more than 5,600 paint and coating removal products that contained methylene chloride, a chemical linked to brain and liver cancer and non-Hodgkin lymphoma.

The government said eBay’s conduct violated the Clean Air Act; the Federal Insecticide, Fungicide, and Rodenticide Act; and the Toxic Substances Control Act.

The case is U.S. v eBay Inc, U.S. District Court, Eastern District of New York, No. 23-07173.

(Reporting by Jonathan Stempel in New York; Editing by Chris Reese, Jonathan Oatis and Bill Berkrot)