The Nagoya District Court rejected the claim of a damage compensation by 780 scammed bidders of internet auction, on 29th March 2008. The ruling was posted on website at the Supureme Court on 13th June 2008.
The plaintiffs were the bidders who had bought goods such as car navigation system and DVD recorders at the internet auction operated by the defendant, Yahoo Japan. They, residents throughout nation of 46 prefectures, claimed a damage compensation against the defendants, because they could not get the purchasing goods that were sold by the auction.
Claim
The defendant had stipulated comprehensive escape clause for the failure of performance obligations on the time of alleged transactions whereas the current compensation clause in his self regulation lays down his responsibility on a limited scale within 500,000 yen. The claimants made several assertions: the clause was void because it is significantly disadvantageous for bidders; the defendant failed to arrange the measure for to secure the performance like as a escrow services between bidders and sellers in auction; it was not enough to prevent fraudulent selling in the internet auction site; therefore such auction system was defective and the defendant was negligent to prepare the system preventing such swindle. On the contrary, the defendant argued they had no negligence; the bidders had opportunity to investigate the sellers calling directly or considering the statement by other bidders on the defendant auction site; through these investigation, if they had any questions, they could choose their behavior not to participate to the auction; the bidder could use the clearing house voluntarily when they wanted to prevent these scams, although it needed a fee; current system had reasonable basis.
The court rejected the claim: the defendant raised reasonable attention to the bidders in suitable occasions.
Hmm…
I have some hesitation to agree this court decision. The defendant might say that the internet auction does not differ from the non-virtual auction. But there are several differences between them, and these rationalize the responsibility on the side of internet auctioneer like as Yahoo. It the non-internet auction, the auctioneer shows the goods to bidders; the bidders can confirm visibly the existence of the goods in the auction room, and they can investigate these items before their biddings. Therefore the probability that the performance of the obligation fails seems to be rare, whilst the bidden goods may be defective; on the other hand, the auctioneer can get profit of fee that these transaction is formed; the auctioneer prepare the opportunity of selling for the seller and it is estimated as significant assistance of scam, if it is only negligence. In general, the person who gets profit connected with the transaction should take responsibility of some sort together with the seller if the performance fails. You can see it in the case of credit transaction in UK. The section 75 of the Consumer Credit Act stipulates that the creditor who loans the purchaser has the connected liability together with the seller. If that is the case, it is rather fair that the internet auctioneer takes responsibility as well as the seller.
Anyway, the escrow service is already available by some electronic money provider such us WebMoney; the company prepares such serveces sinse December 2003.
