(Reuters) - A Los Angeles man who says he was libeled in eBay Inc.'s "feedback" section of its Web site has sued the online auction house for refusing to remove statements he says damaged his reputation. Analysts say the case, sparked by an online sale of vintage Hollywood magazines, cuts to the heart of what makes eBay work: the power of buyers and sellers to keep an eye on each other. Robert Grace, publisher of a Los Angeles legal newspaper, sued eBay and Hollywood memorabilia dealer Tim Neeley this week in a California Superior Court after the Web site refused to remove negative comments Neeley made after selling Grace six vintage entertainment magazines.
According to the lawsuit, Neeley said Grace "should be banned from eBay," and was "dishonest all the way" for alleging in the online forum that the magazines he bought had arrived late and in a worse condition than advertised.
In his lawsuit, Grace demands $2.5 million in punitive damages from eBay and $100,000 from Neeley.
A spokesman for eBay said the company would not comment on pending litigation. Neeley said Grace started the battle of words by complaining in eBay's signature feedback section about the condition of the "Radio TV Digest" magazines he bought. The magazines dated from the 1940s and 1950s, he said.
Grace said when he asked Neeley for a retraction, the memorabilia dealer replied: "Get a life, dude."
EBay warns its users they could be held responsible for fallout from libelous comments they make in "feedback," where buyers and sellers can rate each transaction.
"You are responsible for your own words," a warning on the site states, in part. "You should be careful about making comments that could be libelous or slanderous. You will not be able to retract or edit feedback you left."
Additional Resources:
eBay
Feedback FAQS
Internet Fraud Grew in 2002, FTC Says
EBay's Fourth-Quarter Profits Triple
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