Canadian Court Orders eBay to pay $86,700 for a Pair of Nike Shoes

November 9, 2016

REUTERS/ALBERT GEA

REUTERS/ALBERT GEA

Two Canadian brothers managed to transform a $320 investment in a special pair of Nike shoes into a $98,000 sale on eBay.  After eBay intervened to cancel that sale, the brothers sued the company.  In a recent decision issued by a court in Quebec, eBay was ordered to pay the brothers $86,700.

In 2012, the brothers camped out overnight for a chance to purchase a pair of Nike “Air Foamposite Galaxy 1” shoes.  Nike reportedly created a limited run of those shoes as a special sale offering.

After purchasing one pair of the shoes, the brothers placed the shoes up for sale on eBay.  They were apparently surprised and overjoyed as the bidding for the shoes rose rapidly higher.  It seems that the small production run for the shoes and the timing of their release, in the build-up for the 2012 National Basketball Association all-star game, made the shoes highly prized among collectors.

Matsuura Blakeley BannerEventually a winning bid of $98,000 was received.  The brothers were reportedly preparing to close the transaction, when eBay intervened.  The company informed the brothers that it was terminating the auction and it would not permit the sale to be consummated.

In response to eBay’s action, the brothers sued the company.  They alleged that eBay had unlawfully terminated unilaterally the contract the company had with them.  In response, eBay alleged that the brothers had violated eBay’s terms of service.  The court in Quebec ruled for the brothers.  It determined that eBay had improperly terminated the transaction and that the brothers had not in any way violated the eBay terms of service.  The court then ordered eBay to pay the brothers $86,700.

An interesting aspect of this case is the lack of clarity which continues to surround eBay’s decision to terminate the auction for the shoes.  Reportedly, eBay routinely uses software to monitor the many auctions it manages.  When a particular transaction is deemed by the software to be out of the ordinary, the auction in question is tagged for human review.

Apparently and perhaps not surprisingly a bid of $98,000 for purchase of a single pair of shoes attracted the attention of the monitoring software.  Even after trial, however, it reportedly remains unclear exactly what eBay monitoring software is looking for as it monitors the numerous ongoing transactions and how exactly human intervention into those transactions which are flagged by the software is supposed to work.

Greater transparency into both the automated and human oversight systems now routinely used to police electronic commercial transactions is required.  In order to understand the impact, effectiveness, and biases associated with those e-commerce transactions and relationships, it is essential that government authorities and the public develop insight into the operations of the automated and human transaction monitoring systems upon which the global network of electronic commerce now relies.