eBay 2008 Annual Report Download - page 51

eBay’s Korean subsidiary, IAC, has notified a majority of its approximately 20 million users of a data breach
involving personally identifiable information including name, address, resident registration number and some
transaction and refund data (but not including credit card information or real time banking information).
Approximately 141,000 users have sued IAC over this breach in several lawsuits in Korean courts and we expect
more to do so in the future. There is some precedent in Korea for a court to grant “consolation money” for data
breaches without a specific finding of harm from the breach. Such precedents have involved payments of up to
approximately $200 per user. A consumer agency recently made a non-binding recommendation that IAC make
payments of 50,000-100,000 Korean won (approximately $35-70) to consumers who had complained to it as a
result of such breach. IAC intends to vigorously defend itself in this lawsuit.
Other third parties have from time to time claimed, and others may claim in the future, that we have infringed
their intellectual property rights. We are subject to additional patent disputes, and expect that 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. We have in the past been forced to litigate such claims. We may also become more
vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act, the Lanham Act and the
Communications Decency Act are interpreted by the courts, and as we become subject to laws in jurisdictions where
the underlying laws with respect to the potential liability of online intermediaries like ourselves are either unclear or
less favorable. We believe that additional lawsuits alleging that we have violated copyright or trademark laws will
be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and costly to
resolve, could require expensive changes in our methods of doing business, or could require us to enter into costly
royalty or licensing agreements.
From time to time, we are involved in other disputes or regulatory inquiries that arise in the ordinary course of
business. The number and significance of these disputes and inquiries are increasing as our business expands and
our company grows larger. Any claims or regulatory actions against us, whether meritorious or not, could be time
consuming, result in costly litigation, require significant amounts of management time, and result in the diversion of
significant operational resources.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no submissions of matters to a vote of security holders during the quarter ended December 31,
2008.
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