eBay 2010 Annual Report Download - page 55

ITEM 1B: UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2: PROPERTIES
We own and lease various properties in the U.S. and 29 other countries around the world. We use the
properties for executive and administrative offices, data centers, product development offices and customer
service offices. As of December 31, 2010, our owned and leased properties provided us with aggregate square
footage of approximately 2.0 million and 2.5 million, respectively. As of December 31, 2010, we owned
approximately 2.0 million square feet of space in the U.S. in the following locations: Denver, Colorado; South
Jordan and Draper, Utah; Omaha, Nebraska; Phoenix, Arizona; and San Jose, California, as well as
approximately 60 acres of land in Utah that could be developed if necessary to accommodate future growth. As
of December 31, 2010, we also maintained approximately 0.8 million square feet of leased facilities throughout
the U.S., and approximately 1.7 million square feet of leased facilities internationally in Australia, Belgium,
Brazil, Canada, China, Czech Republic, Denmark, France, Germany, India, Ireland, Israel, Italy, Japan, Korea,
Luxembourg, Malaysia, Mexico, the Netherlands, Norway, Poland, Singapore, Spain, Sweden, Switzerland,
Taiwan, Thailand, Turkey and the United Kingdom.
As of December 31, 2010, the total square footage generally used by each of our Marketplaces and
Payments segments was approximately 2.2 million and 1.9 million, respectively. Our corporate headquarters
located in San Jose, California, occupy approximately 0.2 million square feet.
From time to time we consider various alternatives related to long-term facilities needs. While we believe
our existing facilities are adequate to meet our immediate needs, it may become necessary to develop and
improve land we own or lease or acquire additional or alternative space to accommodate any future growth.
ITEM 3: LEGAL PROCEEDINGS
In August 2006, Louis Vuitton Malletier and Christian Dior Couture filed two lawsuits in the Paris Court of
Commerce against eBay Inc. and eBay International AG. Among other things, the complaint alleged that we
violated French tort law by negligently broadcasting listings posted by third parties offering counterfeit items
bearing plaintiffs’ trademarks and by purchasing certain advertising keywords. Around September 2006, Parfums
Christian Dior, Kenzo Parfums, Parfums Givenchy, and Guerlain Société also filed a lawsuit in the Paris Court of
Commerce against eBay Inc. and eBay International AG. The complaint alleged that we had interfered with the
selective distribution network the plaintiffs established in France and the European Union by allowing third
parties to post listings offering genuine perfumes and cosmetics for sale on our websites. In June 2008, the Paris
Court of Commerce ruled that eBay and eBay International AG were liable for failing to prevent the sale of
counterfeit items on its websites that traded on plaintiffs’ brand names and for interfering with the plaintiffs’
selective distribution network. The court awarded plaintiffs approximately EUR 38.6 million in damages and
issued an injunction (enforceable by daily fines of up to EUR 100,000) prohibiting all sales of perfumes and
cosmetics bearing the Dior, Guerlain, Givenchy and Kenzo brands over all worldwide eBay sites to the extent
that they are accessible from France. We appealed this decision, and in September 2010, the Paris Court of
Appeal reduced the damages award to EUR 5.7 million and modified the injunction. We have further appealed
this decision to the French Supreme Court. In 2009, plaintiffs filed an action regarding our compliance with the
original injunction, and in November 2009, the court awarded the plaintiffs EUR 1.7 million (the equivalent of
EUR 2,500 per day) and indicated that as a large Internet company we could do a better job of enforcing the
injunction. Parfums Christian Dior has filed another motion relating to our compliance with the injunction. We
have taken measures to comply with the injunction and have appealed these rulings, noting, among other things,
the modification of the initial injunction. However, these and similar suits may force us to modify our business
practices, which could lower our revenue, increase our costs, or make our websites less convenient to our
customers. Any such results could materially harm our business. Other luxury brand owners have also filed suit
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