n a decision that could set the stage for how courts respond to accusations of fraud in online auctions, a state judge in San Francisco ruled last week that eBay could not be held liable for bootlegged music sold using its Web site.
The ruling, by Judge Stuart R. Pollak, cites a section of a 1996 federal law, the Communications Decency Act, which says that interactive computer services are not liable for material published on their networks. Until now, the law has been primarily applied to Internet service providers like America Online.
The ruling that eBay, the online auction service, qualifies for the same immunity is the first time that the 1996 law has been applied to an e-commerce Web site, according to several experts in Internet law.
The precedent could be significant for eBay, which has been citing the same law in defending itself from a suit in San Diego, where seven buyers of sports memorabilia that later proved to be fake have charged that eBay acted negligently and violated state auction laws by allowing fraudulent sales to be made using its site.
"We want to be free to run our business and act responsibly but without fear of facing liability at every turn," said Jay Monahan, a lawyer for eBay.
The bootlegged music lawsuit was filed in the Superior Court in San Francisco in August 1999 by Randall Stoner, a music fan and lawyer in San Francisco who noticed that eBay was allowing the sale of illegal recordings of live performances. He sued eBay, using a state law that lets private citizens file complaints to stop companies from pursuing "unfair business practices" even if the person suing has not been personally harmed.
"He brought it as a matter of principle," said Mr. Stoner's lawyer, Charles Perkins, who added that his client was likely to appeal last week's ruling.
Mr. Perkins had argued that eBay was not just providing an Internet service by publishing descriptions of items, but also played a business role in how items were bought and sold. One of his arguments was that eBay took responsibility for telling its users, via e-mail, when they were outbid and that it provided billing, escrow and insurance services.
But Judge Pollak, in his ruling, said that "eBay's role does not extend beyond the scope of federal immunity." He added that the company did not select the items to be sold, did not determine their minimum price, did not inspect them and did not have them in its possession at any time.
The decision is not binding on other courts, including the one in San Diego County where eBay faces the other liability lawsuit. But Scott Winkelman, a lawyer in Washington who specializes in Internet law, predicted that other judges would see the ruling as persuasive and apply it to future decisions.
