eBay 2015 Annual Report Download - page 28

• Our tickets business also faces significant competition from a number of sources, including ticketing
service companies, event organizers, ticket brokers, and online and offline ticket resellers. Some
ticketing service companies, event organizers, and professional sports teams have begun to issue event
tickets through various forms of electronic ticketing systems that are designed to restrict or prohibit the
transferability (and by extension, the resale) of such event tickets either to favor their own resale
affiliates or to discourage resale or restrict resale of season tickets to a preferred, designated website.
Ticketing service companies have also begun to use market-based pricing strategies or dynamic pricing
to charge much higher prices, and impose additional restrictions on transferability, for premium tickets.
• Some sports teams have threatened to revoke the privileges of season ticket owners if they resell their
tickets through a platform that is not affiliated with, or approved by, such sports teams. In March 2015,
StubHub filed suit against Ticketmaster and the Golden State Warriors, alleging antitrust and various
state law violations arising out of the defendants’ restrictive ticketing practices, which include
prohibiting the resale of Warriors tickets on StubHub or any other non-Ticketmaster secondary
exchange.
The listing or sale by our users of items that allegedly infringe the intellectual property rights of rights
owners, including pirated or counterfeit items, may harm our business.
The listing or sale by our users of unlawful, counterfeit or stolen goods or unlawful services, or sale of
goods or services in an unlawful manner, has resulted and may continue to result in allegations of civil or
criminal liability for unlawful activities against us (including the employees and directors of our various entities)
involving activities carried out by users through our services. In a number of circumstances, third parties,
including government regulators and law enforcement officials, have alleged that our services aid and abet
violations of certain laws, including laws regarding the sale of counterfeit items, laws restricting or prohibiting
the transferability (and by extension, the resale) of digital goods (e.g., event tickets, books, music and software),
the fencing of stolen goods, selective distribution channel laws, customs laws, distance selling laws, anti-scalping
laws with respect to the resale of tickets, and the sale of items outside of the United States that are regulated by
U.S. export controls. For example:
• In Turkey, local prosecutors and courts are investigating our liability for allegedly illegal actions by
users of our Turkish Marketplace business (GittiGidiyor). In accordance with local law and custom,
they have indicted one or more members of the board of directors of our local Turkish subsidiary. We
intend to defend vigorously against any such actions and a growing number of these cases have been
dismissed by the relevant courts.
• In August 2012, we were informed that U.S. listings of footwear with religious imagery were visible on
our local Indian site and we immediately removed these listings. In September 2012, a criminal case
was registered against us in India in regard to these listings, and we are challenging the prosecution of
this case.
In addition, allegations of infringement of intellectual property rights, including but not limited to
counterfeit items, have resulted in threatened and actual litigation from time to time by rights owners, including
the following luxury brand owners: Tiffany & Co. in the United States; Rolex S.A. and Coty Prestige Lancaster
Group GmbH in Germany; Louis Vuitton Malletier and Christian Dior Couture in France; and L’Oréal SA,
Lancôme Parfums et Beauté & Cie, and Laboratoire Garnier & Cie in several European countries. Plaintiffs in
these and similar suits seek, among other remedies, injunctive relief and damages. Statutory damages for
copyright or trademark violations could range up to $150,000 per copyright violation and $2,000,000 per
trademark violation in the United States, and may be even higher in other jurisdictions. In the past, we have paid
substantial amounts in connection with resolving certain trademark and copyright suits. These and similar suits
may also force us to modify our business practices in a manner that increases costs, lowers revenue, makes our
websites and mobile platforms less convenient to customers, and requires us to spend substantial resources to
take additional protective measures or discontinue certain service offerings in order to combat these practices. In
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