eBay case law drifts into the realm of the absurd

Recently, the Regional Court (LG) Dortmund decided in summary proceedings (see our article), that the withdrawal period for eBay listings, even when the withdrawal information is sent immediately after the auction ends, is one month, although the legislator, with the redesigned provisions in §§ 355 Abs. 2 BGB, deliberately provided relief for commercial sellers on eBay. The underlying argumentation is incomprehensible to laypersons and only comprehensible to lawyers upon extremely careful examination. It is therefore far from being correct, as the following remarks will demonstrate.

The decision is based on the view that there can be a period of time between the placement of the bid, which later proves to be the highest bid, that is too long for the withdrawal information sent to the buyer in text form immediately after the auction ends to have been provided immediately after conclusion of the contract. If one accepts this as correct, the prerequisites for the exception from the obligation to provide information envisaged in § 355 Abs. 2 S. 2 BGB at or upon conclusion of the contract are not met, so that the withdrawal period is 1 month.

The consequence of this assumption is that during the ongoing auction, each highest bidder – and there can be several dozen of them – would have to be sent a withdrawal notice immediately after placing their bid – and even if they are later outbid again.

It thus appears that there is a temporal separation between the placement of the highest bid and the end of the offer, which can range from a few seconds to several days. This can be substantiated upon superficial examination, inter alia, by the decision of the Federal Court of Justice (BGH) of 03.11.2004 (VIII ZR 375/03) in which it is stated that the declarations of intent by both parties required for a contract to be concluded in eBay listings (auction – not Buy It Now) lie in the listing of the offer (seller) and the placement of the highest bid (buyer). The mere passage of time of the offer only results in the highest bidder being determined. This purely factual circumstance, however, has no significance for the conclusion of the contract.

This is certainly correct, but imprecise. In fact, the decisive declarations by both parties occur in time before the time of the end of the auction. However, this does not mean that these contractual declarations become effective at the time the bid is placed, which would nevertheless be a prerequisite for the view of the Regional Court (LG) Dortmund. The seller, by listing the offer, makes the declaration that they wish to sell the offered item to the highest bidder after the planned duration has expired (more precisely: to transfer it against payment); the buyer, by placing the bid, declares that they wish to purchase the item in the event that they are still the highest bidder at the end of the auction. However, from a natural perspective – and this is the only one that matters – neither party assumes that a contract has already been concluded during the ongoing offer phase. At least one of the declarations is not suspensively conditioned, but resolutively conditioned. Otherwise, a large number of contracts would be concluded during the term of the offer, which would become void again upon the placement of a new highest bid. This clearly does not correspond to the will and understanding of the parties involved.

In the case of the (completely incorrect) assumption of a resolutive condition, a withdrawal notice would thus have to be sent to each highest bidder immediately after placing the offer in order to meet statutory requirements. Apart from the fact that this is technically not feasible on eBay, it would also cause utter chaos. Anyone who has placed a highest bid in the meantime – even if only for a few seconds – would receive an e-mail confirming the conclusion of the contract and providing withdrawal information. In the end, everyone who was ever the highest bidder would believe they had concluded a contract at different prices. A second e-mail would therefore have to be sent in each case. In this, the now outbid bidder is informed that the contract (possibly concluded only a few seconds earlier) is void and that the withdrawal information provided is therefore unnecessary. It remains to be hoped that the e-mails arrive at the recipient in the correct order. That this hardly makes sense and also does not correspond to the actual circumstances is obvious.

The foregoing can be taken even further. eBay uses an automatic bidding system that provides for certain increment steps . For example, from € 1.00 to € 49.99, these are € 0.50. If two bidders, starting from a starting price of € 1.00, bid each other up to € 50.00, but each only places one bid (e.g. bidder A € 49.50 and bidder B € 50.00), 98 new highest bids are generated in less than a second (A € 1.50, B € 2.00, A € 2.50 …. B € 49.00, A € 49.50, B € 50.00) and thus 98 contracts are concluded, of which 97 are immediately resolved due to the resolutive condition. In the end, B is the highest bidder (passage of time) and has acquired the goods at a price of € 50.00. In the meantime, both A and B have each received 49 e-mails with congratulations and withdrawal information and a further 49 (A) or 48 (B) e-mails notifying them that the contract has been resolved after all. A total of 195 e-mails to two bidders – mind you, within a few seconds.

This is precisely what the Regional Court (LG) Dortmund is demanding as a consequence. To describe the result as absurd would be still putting it very mildly.