eBay Business Sues Buyer For Leaving Bad Feedback (EBAY)

In 2006 former eBay (EBAY) CEO Meg Whitman estimated 1.3 million people make a full-time living selling goods on the site. So when eBay implements policies that threaten the livelihoods of its career auctioneers, people start to freak out. The latest: A British mechanic bought a £155 (about $250) cell phone on the site, but what he got in the mail was not only scratched-up, but the wrong model. So he left his seller a bad review, and got sued for libel.

Of course, the lawsuit is ridiculous. But what’s going on? BusinessWeek offers some explanation: In an effort to weed out bad sellers, eBay recently implemented a rule requiring sellers to maintain an average feedback rating of 4.3 out of 5. Failing to do so puts sellers at risk of getting locked out of the system, tanking what might be a full-time business. Thus: Increasingly frantic reaction from sellers, from starting up gripe-sites like ebaysucks.com to lawsuits against buyers.

Tough balancing act: Can’t let buyers think eBay is full of junk; can’t make life impossible for sellers.

See also: eBay Quarter Solid, But Outlook Awful

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