ebay Suing Digital Point

[Dale King]

ebay Suing Digital Point Founder

Digital Point founder, Shawn Hogan, as well as Todd Dunning, Brian Dunning and their companies are being sued by eBay for alleged "cookie stuffing" with
intent to defraud eBay of commission fees.

The auction company is seeking "exemplary and punitive" damages and demanding a trial by jury.

For those of you who don't know what cookie stuffing is, it means setting a cookie without a user generated click. Basically, it steals commissions from affiliates who generate clicks honestly. Like with almost everything else in life, there are both proponents and oponents of cookie stuffing. Some affiliates have argued that cookie stuffing isn't illegal. Others say it's unethical.

With this legal action it's obvious ebay considers cookie stuffing both illegal and unethical.

The court document lists various statutes under which eBay says the scheme was illegal.

The document describes how the defendants allegedly used various techniques to try to hide the cookie stuffing from eBay and Commission Junction, whose job it was to detect fraudulent activity. The scheme had been in operation from at least December 2004 through June 2007, aggregating more than $5,000, eBay says. It has since brought its affiliate tracking inhouse and recently dumped hundreds of affiliates.

Cookie stuffing has been around for several years. Ben Edelman of Benedelman.org was one of the first to publicly document numerous cases of cookie stuffing by affiliates in 2004. However, to my knowledge this is the first cookie stuffing case to go to court. Suffice it to say, there will be many interested observers

With this action eBay is intent on sending a clear and unmistakable warning to affiliates.

Here's the news article:
Courthouse News Service

The court document:
http://www.courthousenews.com/2008/08/26/eBay.pdf

Dale King

[Mega B]

This case has captured the attention of most website owners around the planet and has to be one of the most talked about cases in recent years.

Thanks Dale.

[Dale King]

This case has captured the attention of most website owners around the planet and has to be one of the most talked about cases in recent years.

Thanks, Rick. Yeah, I'm anxious to see how it turns out myself. That being said, I'm putting my money on ebay.

Dale King

[zharlene]

Can't believe Digital Point would do such a thing...glad eBay found out about this.

[BizGuy]

Dale,

Thanks for the interesting post. I had not heard about this yet and agree that Ebay will definitely set an example with Digital Point.

[instockdiecast]

Finally! This would happen sooner or later!

[strategy]

Racketeer Influenced and Corrupt Organizations Act (commonly referred to as RICO Act or RICO) is a United States federal law that provides for extended penalties for criminal acts performed as part of an ongoing criminal organization.

Under RICO, a person who is a member of an enterprise that has committed any two of 35 crimes—27 federal crimes and 8 state crimes—within a 10-year period can be charged with racketeering. Those found guilty of racketeering can be fined up to $25,000 and/or sentenced to 20 years in prison per racketeering count. In addition, the racketeer must forfeit all ill-gotten gains and interest in any business gained through a pattern of "racketeering activity." RICO also permits a private individual harmed by the actions of such an enterprise to file a civil suit; if successful, the individual can collect treble damages.

and

There were 6 charges filed including mail fraud, wire fraud, racketeering and violation of the Computer Fraud and Abuse Act.

[1entrepreneur]

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"eBay says the men devised software programs that, "unbeknownst to the [computer] user, redirected the user's computer to the eBay Web site without the user actually clicking on an eBay advertisement link, or even becoming aware that they had left the page they were previously viewing. As a result, the eBay site would be prompted to drop an eBay cookie on the user's computer even though the user never clicked on an eBay advertisement or even realized that their computer had ever visited the eBay site."
The complaint continues: "once the cookie was stuffed on the user's computer by one or more of the defendant's any future revenue actions initiated by that user when the user later visited eBay intentionally, and not as a result of any advertisement places by defendants, appeared to be eligible for commissions payable to one of the defendants".
eBay claims the defendants also used deceptive means to prevent it from discovering the fraud, and to conceal it. "
================================================== =======
If the above quote is true, it is a low act, and I hope the defendants(Shawn/Digital Point) end up losing alot of money.

Basically, anyone visiting Digital Point(or any of the affected sites) would be inadvertently visiting ebay, and earning the defendants money. Sounds just like something malware/viruses would do.

[HarveyJ]

For the people that can't believe, I gotta say, this isn't the first time Shawn's been implicated in shady dealings.
Further more, a few years back, you've got people like Shoemoney saying how cookie stuffing is a great way of making money and that htey see nothing wrong with it....

Wakeup!

The people at the top of the game did not get there by means that are ethical, or potentially even legal. They just did it before anyone else while it was still a grey area in both terms.

Dale: Less illegal, more against eBay's TOS. I know it's a small point, but in legalese, it's a gaping chasm. Either way, it's pretty low.

[zharlene]

I was reading the thread on DP and many of the members there are defending Shawn (and accusing other DP members). What are they looking for - a cash bonus of some sort? If the affiliate links are all pointing to Shawn's account then of course he had something to do with it IMO...

Completely agree with you HarveyJ. Many of these wealthy webmasters are very smart...and can be very sneaky.

[Dale King]

Dale,

Thanks for the interesting post. I had not heard about this yet and agree that Ebay will definitely set an example with Digital Point.

No problem, Adam. Yeah, there's blood in the water and ebay is Jaws!

Dale King

[Dale King]

Wakeup!

The people at the top of the game did not get there by means that are ethical, or potentially even legal. They just did it before anyone else while it was still a grey area in both terms.[

That's an overly cynical view of the world we live in, and not even close to being accurate. For every bad guy out there, there are at least 100 good guys. The fact of the matter is the great majority of top marketers are honest. Yes, there are always going to be a few bad apples in the barrel. However, contrary to that popular old proverb, they don't spoil the whole bunch!

Dale King