Is Ebay The Next Target For The Music Industry?

Ebay may become the music industry's next target in the quest to preserve the sanctity of copyrights and other intellectual property rights in music on the web. Ebay has become a haven for the sale of bootleg copies of studio tracks and live concerts. Sellers on Ebay have also offered a customized CD service, where the winning bidder can notify the seller of her favorite songs to be burned onto a CD-R and delivered by mail. Ebay receives payment from the seller based on the selling price of the item as offered and a percentage of the final winning bid. No royalties are paid to the applicable artist or music labels from these sales through the Ebay site. Although Ebay will remove auctions of items that infringe upon the intellectual property rights of an artist or a label after it has been notified of the disputed auction by the artist or label, Ebay refuses to institute a global monitoring system to prevent the posting of infringing items for auction by sellers.

Ebay will likely contend that the provisions of the Digital Millennium Copyright Act (DMCA) shield it from liability (a defense used by Napster unsuccessfully in its legal battle with the music industry) and hesitates to institute a monitoring system that may disqualify Ebay from the protection of the DMCA. "The most interesting aspect of any lawsuit by the music industry would be the court's determination of whether Ebay falls within the term 'service provider' as it is...