Way back in August 2008, eBay took legal action against Shawn Hogan, owner of the popular webmaster forum, Digital Point Forums. You can see the full complaint here.
The original allegation was that Hogan had been stuffing cookies to collect eBay affiliate commission payments. From Revenews:
The short version is that eBay alleges that the affiliates named engaged in “cookie stuffing”, specifically generating hidden forced clicks of their Ebay affiliate links. Hidden forced clicks are when an affiliate link is invoked without a physical click by the end user. Various forms of technology and/or coding are used so that the merchant’s site is not actually seen by the end user. The alleged activities in question occurred between 2003 and mid 2007. eBay claims measures were taken to hide the activity and that the defendants denied any wrongdoing when questioned by CJ, which at the time was still running eBay’s program, regarding suspicious traffic.
On the 24th June 2010, a California grand jury handed down indictments again Hogan and an (alleged) partner in crime, Brian Dunning. You can read the Sean Hogan Indictment here, and the Brian Dunning Indictment here. Both have been charged with wire fraud and criminal forfeiture. Both have since appeared in court and been released, having put up a $100k bond and surrendered their passports. Hogan and Dunning will next appear on th 9th September and August 19th respectively.
I don’t understand American law well enough to comment on the specifics so I’m again going to refer to the Revenews post:
Indictment Specifics
Several interesting specifics were outlined in both of the indictments:
- Between 2006 and June 2007, Shawn Hogan (Digital Point Solutions) earned approximately $15.5 million in commissions from eBay. Hogan was eBay’s number one affiliate.
- Between 2006 and June 2007, Dunning (Kessler’s Flying Circus) earned approximately $5.3 million in commissions from eBay. Dunning was eBay’s number two affiliate.
- Hogan and Dunning are accused of generating hidden forced clicks on both their own web sites as well as sites not connected with the defendants in order to increase the number of computers storing the eBay affiliate tracking cookie.
- The legal criteria for wire fraud was established not on money (commissions) being transferred over the wires, but because of transmission of the tracking cookie between states and internationally.
- The affiliates attempted to hide the activity from eBay and CJ by not engaging in the cookie stuffing on computers located in San Jose (eBay headquarters) or Santa Barbara (CJ’s headquarters). This is geo-targeting and is readily known to be used by affiliates engaging in questionable activity. Of course, not all geo-targeting activity in nefarious.
- Both Hogan (2005) and Dunning (2006) denied any cookie stuffing behavior when questioned by CJ.
- Each individual wire fraud account is related to a particular incident on an IP address outside California (location of eBay servers) where an affiliate cookie for the defendants was set.
There was significant amounts of money involved in this – they were paid more than $20m between them. It will be interesting to see how this pans out when they next appear in court.
{ 2 comments… read them below or add one }
WOW, that’s insane..
I’ve never really followed the story of Shawn vs eBay, but came across this looking for another said lawsuit..
I don’t understand why he would’ve been doing these things considering he owns one of the biggest forums on the internet?! Surely he must be making his dough through that! I really don’t understand some people’s greed!
This is a great post, I’ll be watching to see if you post any results of the August 19th hearing!
Thanks a lot,
Chuckun
Please keep the “name” as a nickname or actual name – if I let people start using anchor text links, its a slippery slope and becomes a nightmare to police. I’ve edited your link.
From what I recall, Digitalpoint was only making $20k a month or so in Adsense. So its not hard to see why the temptation was there to make $1m/month, especially if what Shawn has now said is true and Ebay were effectively letting him do it.