Government Investigating Some of Its Practices, EBay Says

EBay Inc. said Friday that the federal government last month asked it to provide records and information related to an investigation of possible illegal transactions on its Web site. The request was made Jan. 29, the San Jose-based Internet auction house said.

The government’s investigation includes an examination of the company’s practices regarding the possible illegal transactions, and the company said it is cooperating fully. EBay said it has been ordered to release no further details, and a spokesman declined to comment.

EBay, which does not sell any goods itself, hosts online auctions of merchandise ranging from used cars to Beanie Babies.

Separately Friday, EBay said it won a temporary restraining order against a dealer who is allegedly using its popular Web site to sell banned software and CD-ROMs.

EBay obtained the order after an unsuccessful attempt last month to stop Jim Douglas, a Cincinnati-based dealer, from using its site. Douglas had simply re-registered under different names and e-mail addresses, then independently contacted bidders to avoid paying EBay’s auction fees, an EBay attorney said. Among the items Douglas allegedly sold through EBay were counterfeit software and CD-ROMs containing instructions on how to intercept cable TV signals. He failed to appear for a court hearing Friday. He could face fines or a prison term if he violates the court order.

EBay’s effort regarding Douglas is part of a larger company effort to crack down on legally questionable transactions. Starting next month, EBay will ban the sale of guns over its site, because it is impossible to ascertain whether bidders are legally permitted to own guns.

EBay shares rose $34.50 to close at $334 on Nasdaq. The news of the probe was released after markets closed.