When a company with the popularity of eBay sets an exclusive policy that says a seller cannot list a coin as certified unless it is one of a perceived top-tier grading service, it was only a matter of time before they would be sued.
It is being reported that eBay, the American Numismatic Association, the Professional Numismatics Guild, and the company of ANA President Barry Stuppler are being sued in the Eastern District of New York alleging anti-competive conduct.
The primary defendant is a company called Universal Grading Service of New Jersey. Others have ownership association with the company.
The case was filed in late August with a conference scheduled to be heard in January. The suit claims that a conspiracy exists between the defendants against small grading companies. According to the complaint, the plaintiffs are saying that eBay’s listing policy “limits the flow of goods in commerce.”
It is expected that the plaintiff will ask for class-action status.
One of the first questions would be whether New York is the proper jurisdiction for this suit. None of the organizations or officers are located in New York. Filing in New York may have been a strategic move since the court is known to be business friendly with a bias to opening markets. But without clear jurisdiction, it can be speculated that this case will be dismissed on those grounds.
Another issue is whether a non-government entity has the legal right to restrict how their site is used. Although I am not an attorney, I seem to recall similar cases where the commercial entity can restrict access to their services.
Interestingly, while UGS chooses to fight in court, Dominion Grading Service, which was formed out of the ashes of PCI, has chosen to let the market decide. DGS wants to earn respect rather than suing for it. That may be a better way to go.