SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

JOHN ROCKERS, MARK RAWLING and
BRIAN MORK , On Behalf of Themselves and for
the Benefit of All with the Common or General
Interest, Any Persons Injured, and All Others
Similarly Situated,
Plaintiff,
vs.

EBAY, INC., et al.,
Defendants.

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Case No. 1:05-CV-035930

CLASS ACTION

NOTICE OF SETTLEMENT OF CLASS ACTION


DATE ACTION FILED: 02/17/05



THIS IS A LEGAL NOTICE. YOUR RIGHTS MAY BE AFFECTED.

PLEASE READ IT CAREFULLY.

To: All eBay users from February 16, 2001 to the present. If you claim to have been harmed by eBay raising the eBay bidder's existing bid where no higher competing bid had been made and where raising the bid was not necessary to meet a reserve minimum you are a Member of the "Class" and your rights may be affected by the proposed class action settlement of a lawsuit alleging that eBay would automatically increase in certain circumstances an existing bid where no competing bid had been made and where it was not necessary to meet a reserve minimum. eBay denies any and all of the contentions and allegations of wrongdoing relating to eBay's increasing an existing bid where no competing bid had been made and where it was not necessary to meet a reserve minimum, and denies that the Members of the Class have suffered any damage. This Notice summarizes the terms of the settlement, and explains your rights and options under the settlement.

I. THE LAWSUIT

On February 17, 2005, a complaint was filed by plaintiff Glenn Block in the Superior Court of the State of California County of Santa Clara ( the "Court") as a class action alleging that eBay's automatic increase in certain circumstances of an existing bid where no competing bid had been made and increasing the bid was not necessary to meet a minimum reserve was improper and artificially inflated the bids of eBay buyers, thus causing damage to eBay buyers (the "Action"). On April 17, 2006, an Amended Complaint which, among other things, substituted Plaintiffs John Rockers, Mark Rawling and Brian Mork for the original plaintiff was filed in the Court. The caption of the Action is Rockers v. eBay, Inc., et al., Case No. 1:05-CV-035930.

II. THE SETTLEMENT TERMS

The parties participated in mediation with the Honorable Read Ambler (Ret.) in an effort to resolve the Action. As a result of the mediation and in order to settle the allegations in the Action, eBay has agreed to cease the conduct alleged by making the following "curative disclosure" that is relative to the misrepresentations claimed by Plaintiffs:

In response to a system prompt, if a high bidder attempts to raise his maximum bid when such bidder is then between bid increments, eBay shall first disclose to such bidder the exact amount of any resulting bid increase that would otherwise occur by virtue of the bidder raising the maximum bid. By way of illustration only and using the facts set forth in paragraph 23 of the Complaint, upon raising the maximum bid once plaintiff had reached his existing bid maximum of $111.00, eBay would disclose whether raising the maximum bid level would result in the $111.00 bid being raised to the next bid increment over the last competitive bid of $110.00 and, if so, specify the exact amount to which the bid would be raised - that is, $112.50.

In addition, eBay has agreed to pay the sum of $2.1 million ("Settlement Fund"). The Settlement Fund will be distributed to one or more federally tax exempt charities chosen by Plaintiffs' Counsel and approved by the Court. None of the charities selected by Plaintiffs' Counsel and approved by the Court shall be directly or indirectly affiliated or associated with Plaintiffs or their counsel. Based on information provided by eBay to Plaintiffs' Counsel, the $2.1 million is estimated to be approximately 50% of the claimed damages and all other economic harm allegedly incurred by Members of the Class. Distribution of the Settlement Fund to charitable organizations is appropriate because any attempt to distribute the Settlement Fund to individual Members of the Class - whose average recovery would be less than $1.00 - would result in administrative costs that would consume any settlement proceeds.
eBay has also agreed to separately pay Plaintiffs' Counsel $800,000 for past and anticipated future attorneys' fees and expenses regarding the Action, subject to Court approval ("Attorney Fees"). This amount was negotiated and agreed to after the substantive provisions of the settlement were reached and after the memorandum setting forth the material terms of the settlement was executed. Plaintiffs' Counsel, subject to Court approval, intend to pay up to $104,300.00 and $150,000.00 to Glenn Block (or Glenn Block, P.C.) and Daniel Block (or DSB Consulting, Inc.), respectively, for their expert services in this Action from the Attorney Fees. Glenn Block was the original plaintiff in the Action and provided technical assistance to Plaintiffs' Counsel regarding eBay's auction practices, the allegations in the Action, the calculation of damages and economic harm, and due diligence. Daniel Block is Glenn Block's son and provided computer, programming and data mining expertise that was otherwise unavailable to Plaintiffs in a timely and efficient manner. Their expertise was unique and necessary for the successful prosecution of the Action.
eBay shall also separately pay, subject to Court approval, the three Plaintiffs named in the Amended Complaint, $1,000 to reimburse them for their time, costs and efforts in representing the Class.