There are lots of lawsuits coming out of the federal government these days in the U.S., but most of them seem to start with the Federal Trade Commission. Meanwhile, online auction kingpin eBay (NASDAQ:EBAY) discovered they can come from other places, like the Department of Justice. The DOJ leveled a complaint against eBay over some of its products, which violate a string of laws. That was enough to send eBay slightly lower in Wednesday afternoon’s trading.
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At last report, eBay was selling products that violated the following laws: the Clean Air Act, the Federal Insecticide, Fungicide, and Rodenticide Act, and, to top it off, the Toxic Substances Control Act. Not exactly the kind of thing the Department of Justice is normally seen dealing with, but reportedly, the DOJ filed the complaint “on behalf of the Environmental Protection Agency.” Over 343,000 devices were involved with these various violations, particularly related to “aftermarket defeat” devices for cars to get around emission controls. Further, eBay also had several types of pesticides that were previously banned.
As for eBay, it offered up a response to the lawsuit not long after it was filed. The response noted that eBay’s focus is on “…maintaining a safe and trusted marketplace” and that it already takes several steps to address the sales of illegal devices, including “…dedicat(ing) significant resources,” “…implement(ing) state-of-the-art technology,” and “…ensur(ing) our teams are properly trained to prevent prohibited items from being listed on the marketplace.” So how the 343,000 items in question got through eBay’s clearly extensive network of protections is, at best, unclear.
Is eBay a Good Stock to Buy?
Analysts, meanwhile, are maintaining their distance. With six Buy ratings, nine Holds, and two Sells, eBay stock is consensus-rated as a Hold. Still, with an average price target of $50.29, eBay stock comes with 17.58% upside potential.
