eBay not a “consumer reporting agency”

Plaintiff McCready was a seller on eBay who had some dissatisfied customers. They voiced that dissatisfaction by leaving negative feedback about McCready in eBay’s Feedback Forum. Instead of working to “make good on his sales,” McCready embarked on “retaliatory litigation” against a number of individuals and entities, including eBay.

McCready filed lawsuits in different fora around the Midwest, including one in the U.S. District Court for the Central District of Illinois. He alleged, among other things, that eBay violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §1681 et seq., by providing false and misleading information in the Feedback Forum. The district court dismissed the claim, and McCready sought review. On appeal, the Seventh Circuit affirmed.

To succeed on the FCRA claim, McCready would have had to show that eBay is a “consumer reporting agency” as provided by the statute. He failed to do so, however, because he could not show that the Feedback Forum is a “consumer report.” By definition, a “consumer reporting agency” provides “consumer reports,” and without showing that the Feedback Forum is a “consumer report,” eBay could not be considered a “consumer reporting agency.”

The court held that “given the broad statutory purpose of preserving individuals’ privacy,” a “consumer” under the FCRA must be an identifiable person. The Feedback Forum, however, is arranged by usernames, so anonymity – to the extent eBay sellers so desire – remains intact. Any information about the person behind an eBay username would not be about an “identifiable person” as required by the FCRA.

Citing to the case of Ippolito v. WNS, Inc., 864 F.2d 440 (7th Cir. 1988), the court further held that the FCRA applies only to information that is to be used for consumer purposes, not commercial, business or professional purposes. The Feedback Forum assists eBay shoppers in deciding whether to purchase goods from a particular seller, and that is an “inherently commercial” activity. Without the required consumer purpose, the Feedback Forum could not rise to the level of a “consumer report.”

McCready v. eBay, Inc., — F.3d. —, (7th Cir. July 10, 2006).