eBay Has To Turn Over Info On Canadian PowerSellers

from the can't-get-off-that-easy dept

Mon, Nov 17th 2008 1:38am — Mike Masnick

Michael Geist points us to the news that a Canadian court has told eBay Canada that it needs to cough up info on Canadian PowerSellers. The case involves attempts by the Canadian government to determine if eBay PowerSellers are underreporting earnings on their taxes. Canadian tax officials had asked eBay Canada to hand over data on various Canadian PowerSellers, but the company refused, noting that the info was actually held by eBay in the US, and thus the data was not subject to the Canada Revenue Agency's jurisdiction. The court disagreed, noting that eBay Canada had easy access to the data at a "click of the mouse." For the most part, this does make sense, though it does raise some questions about jurisdictions. Perhaps this is a special case, due to the close relationship between eBay and eBay Canada, but it still is a bit worrisome that a Canadian court would rule that info on an American server is subject to Canadian laws. You could see that coming back up in a bad way in the future.

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Filed Under: canada, jurisdiction, powersellers, us
Companies: ebay

30 Comments

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Lawrence D'Oliveiro, 17 Nov 2008 @ 1:53am

Turnabout is fair play
iCraveTV, thou art avenged!
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Anonymous Coward, 17 Nov 2008 @ 2:26am

I've always said ...
... that eBay was a great way for the gov't. to finally tax garage sales.

Anyway, with the way eBay is going, it'll soon be out of the garage sale business and into the Amazon-like e-commerce business.
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Anonymous Coward, 17 Nov 2008 @ 2:40am

granted its eBay USA, but it holds Data for transaction done at least in Part by Canadians.

and regardless of were to sale is being done (buyer in USA India, France or where ever) as per Canadian law the revenue from those transactions are subject to Canadian Tax (think of it as an export business).

with that said I still see Mikes point about the troublesome issue being raised about jurisdiction, it also makes me wonder when various customs agencies will start requiring buyers to declare the goods they get from ebay (or other purchases over the internet).
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Deepdiver, 17 Nov 2008 @ 3:30am

Juisdiction
The bit that they are missing is not how easy the access is, but the fact that the information is stored on AMERICAN severs. I don't care how close a relationship Ebay and Ebay Canada have. If you need info from the US get a US warrant. I fail to see how they got around this..
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Chief Elf (profile), 17 Nov 2008 @ 3:38am

Re: Juisdiction
When Ebay Canada clicks to fetch the data to use that data as part of their business processes, the data is on Canadian computers and subject to Canadian laws. The fact that it is stored on in RAM while on Canadian computers and the long term (hard-drive) storage is farmed out to servers outside the country is misleading. Canada has a right to the data that is used by Canadian computers for Canadian businesses. Where that data is stored long term is irrelevant.
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mike allen, 17 Nov 2008 @ 3:46am

are they
perhaps they took note of the french copyright people
http://techdirt.com/articles/20081114/1457012833.shtml
when will we elect the first world government and president!!!
there appears now no such thing as a national boundary when it comes to courts.
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Adam WAsserman, 17 Nov 2008 @ 4:48am

Re: Re: Juisdiction
@ Chief Elf

What a delightfully innocent point of view!

For fun (since you are an elf) consider the following facts:

1. PIPEDA (Canada's Personal Information Protection and Electronic Documents Act) obliges eBay Canada to

"obtain your consent when they collect, use or disclose your personal information"

as well as

"destroy, erase or make anonymous personal information about you that it no longer needs in order to fulfil the purpose for which it was collected".

2. Under Canadian law, government agencies have no inherent or statutory "rights to data."

3. A verbal conversation between two people, held with a reasonable expectation of privacy (not in a public place), is not automatically available to Canadian law enforcement, or Crown prosecutors, or any other government agency. It requires consent form one of the two parties, or an order from a court ith proper jurisdiction.

I'm just sayin'.
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Anonymous Coward, 17 Nov 2008 @ 5:24am

I am not a lawyer but to me the issue of where the data is held is not relevant at all to the issue.

eBay has a Canadian presents and as such eBay Canda is subject to Canadian law including court ruling demanding what ever Canadian law allows under Canadian law.

What would be real interesting would be if eBay did not have a Canadian presents and as such was not subject to Canadian law. No wait that is not correct either as the US is extraditing a UK subject who has never been in the US from the UK for breaking in to a Pentagon computer system so eBay would be just as much liable.

Under the concept of equal rights one country would have the same rights as any other country.
Under the concept of equal protection under the US Constitution for US citizens US Citizens are not subject to foreign courts inside the US ie this means that a US citizen is not subject to German court for actions occurring inside the US. Would some one please tell this to the Germans who had a US citizen arrested in Denmark and jailed in Germany for having Nazi information and publications on a US website housed in the US.
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Anonymous Coward, 17 Nov 2008 @ 5:49am

Re:
I second the AC.

Where the data is held is irrelevant. eBay is a party to the transaction involving the Canadians. Hell, potentially some international trade laws cover the transactions.

A lot of stupid stuff happens between countries and law enforcement. Everyone is afraid to hurt anyone's feelings or wants their own favor in return so stuff happens that probably shouldn't without people thinking about it. It doesn't help that the laws are all different in different companies.

But as an American I don't see what the issue is here. Tax records are powerful records for sure, but here you basically have a company with a Canadian presence seemingly trying to hide information from what, to me, seems a reasonable request.

It makes you wonder just what eBay is hiding. I don't buy that they're looking out for the customer as their actions in other areas (PayPal) suggest that isn't their first thought.
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Heavens, 17 Nov 2008 @ 5:50am

@Chief Elf... Re: Juisdiction
Perhaps one of the dumbest things I've read here...

Stored in RAM? Farmed out? eBay is a US company...there is no farming out. So now anything that you access from a computer in Canada is now Canadian? Where the data is OWNED is relevant. If the data can't be received from Canadian citizens then I think you are out of luck and it's not eBay's job to get involved in those issues. Even if eBay gives them sale information it doesn't have profit information and it doesn't have taxable sales information.
If I were eBay I wouldn't provide that stray bullet either.
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Anonymous Coward, 17 Nov 2008 @ 5:54am

FUCK THE WORLD
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Anonymous Coward, 17 Nov 2008 @ 6:30am

Re:
I think the opposite side of the coin is just as worrisome. I can foresee companies placing servers in various locales for the express purpose of avoiding gov't jurisdictions. It is a bit idealistic to believe the internet allows you to ignore borders and the long reach of the gov't.
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mobiGeek, 17 Nov 2008 @ 6:34am

On the flip side...
...a bit worrisome that a Canadian court would rule that info on an American server is subject to Canadian laws.
So are we suggesting that in a global economy that US companies specifically set themselves up to not be eligible to host data from other countries?
I'm not suggesting that companies that have servers in the US should automatically cough up data upon request. But I am suggesting that the idea is not as simple as "the servers are in the US so only fall under US law".
If I was operating a business outside the US and wanted my data hosted (don't want to have IT overhead), then I know need to worry how my data may not fall under my own country's business laws? Seems like a sure way to ensure the US gets overlooked by any bank, insurance company, or practically any serious business as a potential outsourcing of IT infrastructure.
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mobiGeek, 17 Nov 2008 @ 6:37am

Re: @Chief Elf... Re: Juisdiction
Wal-mart is a "US company". Do the stores operating in Canada not need to follow Canadian laws?
Same goes for eBay Canada. For that (sub)company to claim that it operates without any data ("it is held by eBay US") is at best a legal loophole, but more likely verging on contempt.
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Xanius, 17 Nov 2008 @ 6:56am

Re:
Comparing this to extraditing somebody that broke in to a government computer system is wrong. They are completely separate things. One is a criminal offense done maliciously, the other is about data privacy and who has rights to what data.

Personally I think that ebay canada is in the wrong, they operate in canada and for their income reporting they have to have all of the information about canadian transactions to keep a paper trail on where the money came from.
It doesn't matter if the server is hosted in the US, it's accessible by ebay canada and has information pertaining to their business. That makes it under canadian authority when requested by a court.
And who doubts that the US government would issue an order to have the information handed over anyway?
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Rose M. Welch, 17 Nov 2008 @ 7:34am

Re: I've always said ...
Dunno where you're from, but in OK and TX there's is a garage sale permit fee, and you have to pay taxes afterwards.
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Derrick Zoolander, 17 Nov 2008 @ 8:28am

um...
Does this mean (for those arguing against the Canadian gov's rights to the info) if we put our data on servers in the Bahamas we can do whatever we want?

Nope. The activity should be governed and its pretty easy to see where the income taxes should be levied. The country of residence of the person making the money. I mean we're not talking about taxes and duties which are already thrown on and in huge numbers I might add. This is strictly for those operating businesses to pay their fair share of taxes in the same way anyone else does. Doesn't seem complicated to me. The data just tells the gov how much is owed.
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Sean, 17 Nov 2008 @ 9:01am

Just change the law...
...and forbid ebay from storing info on Canadian-registered sellers on servers outside of Canada. That'll really make things complex for eBay and cost them buckets of cash.
The advantage of being a government is that you don't care how the company does it - you just mandate that they do!
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MikeR, 17 Nov 2008 @ 9:05am

Re: Re: Re: Juisdiction
Adam,

Let's look.

1. PIPEDA (Canada's Personal Information Protection and Electronic Documents Act) obliges eBay Canada to
"obtain your consent when they collect, use or disclose your personal information"

eBay did that or you would not be a "powerseller". Read the license.

as well as

"destroy, erase or make anonymous personal information about you that it no longer needs in order to fulfil the purpose for which it was collected".

Might be applicable - I'm not a lawyer.

2. Under Canadian law, government agencies have no inherent or statutory "rights to data."
Really? You mean my employer is not required to send my pay data to the government? Banks don't have to report my interest earnings?

3. A verbal conversation between two people, held with a reasonable expectation of privacy (not in a public place), is not automatically available to Canadian law enforcement, or Crown prosecutors, or any other government agency. It requires consent form one of the two parties, or an order from a court ith proper jurisdiction.

There is no reasonable expectation of privacy here - the transactions are open to all to see. Just look at the powersellers history.
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johnos, 17 Nov 2008 @ 9:12am

Tricky Issue Both Ways
Normally, your jurisdiction objection would resonate. The French example referred to in other comments shows the danger of not properly curtailing jurisdiction. However, there is another side to this. It was eBay's decision to set up a Canadian business. It was also their decision to place the "means of production" the servers, in the US. This was not done for nefarious reasons, but I presume for efficiency. However, someone doing business in Canada cannot escape Canadian jurisdiction by placing the means of production in another country, even if that placement was not done to escape Canadian law. If they want to do business in this country, they have to comply with the law, and especially with our tax regimes. No Canadian vendor selling to other Canadians via eBay should have any expectation they can avoid taxes because eBay's servers are in the US.

The practice of setting up servers in the US for services in other countries is a ticking time bomb. Although I live in Canada, my email, blog and web pages are all on US servers. This is inherently faulty because it subjects me to 4 sets of laws. US, California, Canada and Ontario. To the extent these laws are contradictory, its my problem. Even though I'm posting Canadian content in Canada for a Canadian audience, I'm liable to DMCA take-downs. I could get a take-down for material that is public domain in Canada, but not in the US.

The point is that tech companies have played the jurisdictional card when it suits. They can't complain when it comes back to haunt them.
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Jason, 17 Nov 2008 @ 10:55am

Re: Re: Re: Juisdiction
Yeah, but this isn't personal information. This is public commerce information, aside from that whenever you make a purchase subject to the tax laws of a governing jurisdiction, your consent to the release of tax reporting is implicit in the completion of the transaction.

That the actual ebay sellers have not provided the government with the required information sua sponte is sufficient cause for their tax agency to press for discovery.
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Jason, 17 Nov 2008 @ 11:23am

No jurisdictional issue
It's not like Canada is pressing for the US-based servers to be packed up and extradited. It's also not like they expect to exert any authority over any US operational units of ebay.

Courts: ebay Canada you are hereby ordered to produce X documents including electronically recorded information regarding X.

EC: Well those documents are on US-based servers, and you can't force anyone in the US to do anything.

Courts: Yes, well we don't care if they give you the information or not, YOU have to get it to us.
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Jesse, 17 Nov 2008 @ 12:04pm

Especially considering Canadians were all worried that the patriot act would open up private information about Canadians to the US government...interesting case.
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GreyWolf, 17 Nov 2008 @ 12:15pm

Re: Juisdiction
Your comment is not without merit, and would be worthwhile were it not an extreme case of the pot calling the kettle black!

Under your wonderful Patriot Act (and a number of other statutes), data held on servers outside the US by related are subject to US court jurisdictions. And in some cases, even physical records have been deemed subject to US jurisdiction.

These can be arms-length companies (not subsidiaries) and only related through a parent corporation. Only one of the companies needs to be in the US before ALL its business records can be subject to the US data sweeping (and don't think it hasn't been used... it definitely has).
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Anonymous Coward, 17 Nov 2008 @ 7:23pm

The idea that tax "authority" is more important than any other consideration is beyond evil.

Ironic isn't it that Oil Companies can sell physical product anywhere on planet earth and just ignore governmental taxation on profits but 'garage-sale Ebay' is somehow fair game?!
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whatajoke, 19 Nov 2008 @ 6:42am

instylewithbebe SHILLING ACTIVITY TO THE MAX
Is ebay seller instylewithbebe kidding me or all of us? This new seller instylewithbebe must be magic. starts all the bids out at 99 cents to save insertion fees, then sudddenly has tons of bids ON EVERY ITEM. Mind you that this is a new seller...yeah, sure !!! for being a newbie, this seller is incredible. Has multiple of bids on every single item listed. Opening bid is always .99 cents and almost immediately the bid is upped by the same shiller. Can someone explain to me how instylewithbebe items are coming up in ebay's new search???? Only power sellers are granted that luxury. So, here it is, this so called new shiller , er I mean seller, LOL, is involved greatly with a lot of people to shill these items above what they sell for in the actual store. Is ebay blind or just allowing it to collect the final value fees, well we know that. ebay is know for those shananigans. my dream is to see all honest sellers get off of ebay until they wise up and do the right thing. that goes for their co-conspirator paypal. I can't stand ebay and paypal, they insult our intelligence. check it out this seller instylewithbebe is up to no good again, and again. I am almost embarassed by the shilling going on there. why would one buyer keep bidding on the same item and increasing the bid all 8 bids are by the same buyer. why not wait until the last minutes and get the item for 99 cents or slightly more? Can anyone say and spell S H I L L I N G & C R O O K S ?
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JAMEStheJUST, 21 Nov 2008 @ 6:52pm

EXPOSING THE SNEAKS
SELLERS GET THE HELL OFF OF eBay. WHAT THE HELL AILS YOU PEOPLE ANYWAY? THEY ARE NO GOOD AND THAT PIERRE, THAT LITTLE RUNT.. THIS CREEP WAS ONCE ONE OF US. HE SENDS THE MONEY WE MADE FOR HIM OFFSHORE… NO DON'T KEEP IT THE USA YOU SNEAKY SCUM BAG. YOU ARE A TRAITOR. YOU HEAR A TRAITOR!!! PAY YOUR STOCKHOLDERS YOU !!!@#$%^&&* eVER HEAR OF AN ARAB NAMING THEIR KID PIERRE? SURE YOU DID..

THEY DID THROW ME OFF BUT NOT AFTER I TURNED THE TABLES ON THEM WHEN THEY TRIED TO ROB ME. I GOT THEM 1ST.

IT IS THE DUTY OF EVERY EXISTING SELLER & BUYER ON THIS LOW DOWN SIDEWINDER SITE TO DO SO. AT LEAST A SIDEWINDER WILL BITE YOU OUT OF SELF DEFENSE BUT AN EBAY STAFF SNAKE WILL BITE FOR THE SADISTIC PLEASURE OF IT.

YOU ARE VERY EVIL AND I ONCE PREDICTED EBAY WILL FALL. MY NEXT PREDICTION FOR THIS FACELESS CORPARATE MONSTER WILL BE IN THE COURTS.

THE SINS OF EBAY AS FOLLOWS
DO A SEARCH FOR QUOTE AUCTIONS, TEST AUCTIONS, SEE HOW MANY THOUSANDS ARE BEING LISTED DAILY.
EBAY IS INFLATING THEIR STATS WITH THESE BOGUS LISTINGS .WHY? SO THE STOCKHOLDERS DON'T GO POSTAL. THIS IS ILLEGAL. WRITE YOUR CONGRESSMAN & US STATE ATTORNEY .

I REPEAT GET THE HELL OUT OF THAT THAT BLACK HOLE THEY SYSTEMICALLY CREATED TO STICK IT UP OUR KAZOOS. THERE ARE OTHER SITES.. I JOINED BANANZALE AND I'M NOT DOING BAD BUT IT WILL BOOM. AS SOON AS THINGS GET BETTER. SO LIST UP AND WAIT FOR THAT DAY. THERE ARE MANY OLA SITES THAT WILL BE AS GOOD I'M SURE.

DIE EBAY DIE. I WANT TO WATCH YOU SUFFER. NOT YOU HONEST PEOPLE. I LOVE YOU GUYS AND MEAN THAT. (JAMES THE JUST)

— james
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thedemiseofEbay, 21 Nov 2008 @ 7:31pm

UK SELLERS BALTICAMBERWORLD
Why stop at Canada? Keep going! Give the UK a taste of this too. They (some) are the ones who say they never receive their items. There are some really great sellers and buyers, too..eBay should leave them alone..BUT THE FRAUDSTER BalticAmberWorld is one on my list. She screwed every seller on ebay. Oh lil Ana, do you ever get those items you screamed at the top of your lungs that you never received and told pay pal YOU SUSPECTED FRAUD! When you did receive all of them you creepy thief. CUSTOMS VERIFIED IT. Now you have a site and sell on ebid.uk, should all the sellers that you ripped off come to your site and rip you off? I would love that, but I have high morals and wasn't raised that way. I was a business person DOING THE RIGHT THING AND YOU ROBBED OUT OF 320 BUCKS. DID YOU ENJOY WEARING ALL HIGH END CLOTHING FREE? You robbed the hell of me, don't try to back peddle out of this. You are a scumbag scam artist and advise ALL never to deal with balticamberworld on their site or any site. THIEVES and LIARS!!! So ebay snot turn over the UK info too, especially balticamberworld. How's that Ana? Customs have checked you and your activities out. Could you advise me of the outcome. LOL! Thanks I would love to kick back, relax and have a latte when you spill your guts out . MAKE SURE IT'S ON THE LEVEL.
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2obviousnot to comment, 22 Nov 2008 @ 11:35pm

INSTYLEWITHBEBE DOES SHILL ON EBAY
hey i cheked that site out yep, low insertion fees bunches of bids i looked real close and seen the pattern its only now that she let a few articles of cloths go for a low amount. its so obvious whats goin' on there. seen this before time time over jus a group of friends family anf friends of friends and friends of fam's and off they go to the races too too obvious. i'm watching all the bids, just for the fun of what i see. admit that i feel a bit sorry for other sellers paying the higher fees cuz no one in there right mind would start to bid immed. they all know to wait to last minutes. its bebe0 second factory over runs or damaged so minut ya cant tell other big time bebe sellers have done it for years. but i do see its being all shilled geez ebay is really a mess now who would have guessed? lol
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2obviousnot tocomment, 22 Nov 2008 @ 11:45pm

Re: EXPOSING THE SNEAKS
hey j, i'm feelin ya boo makes sense to me im jus a watcher there passes my time when im on my cell they been messing with all for like a second. arab named pierre say what now if a sister or a brother did this it would be bid time 4 to 8 peace
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