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eBay, PayPal face court action

Class action alleges unfair monopoly

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eBay warned shareholders yesterday that it is facing a possible class action suit in the state of California and is likely to be hit by more patent cases.

The suit alleges that eBay and PayPal acted "to improperly 'monopolise' the forms of payment that sellers can use on eBay".

The plaintiff claims treble damages and an injunction to stop eBay behaving in a similar way again. The news emerged from eBay's filing of its annual statement with the Securities and Exchange Commission. The case was originally to be heard in Texas.

The statement adds that eBay's ticket subsidiary StubHub is also facing a purported class action case for allegedly printing receipts which contained more than the last five digits of credit card numbers. eBay said: "We believe that we have meritorious defenses and intend to defend ourselves vigorously."

eBay also warned that it expects to face a growing number of patent cases. The quarterly report says: "We will increasingly be subject to patent infringement claims as our services expand in scope and complexity. In particular, we expect that we may face additional patent infringement claims involving various aspects of our Marketplaces, Payments, and Communications businesses."

The online auctioneer warns it could also face legal action for breaching copyright and trademarks, especially in Europe. ®

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