Social Media is a Socially Irresponsible Company’s Worst Nightmare

Posted on August 4, 2009. Filed under: eBay | Tags: , , , , , , |

In past conversations with eBay Powerseller representatives, the word “testing” was used quite frequently in our conversations.  I have been told by eBay on more than one occasion that eBay was implementing new policies that they were “testing” the effects of and then eBay would decide whether the policies had achieved the objectives eBay wanted.  If not, eBay would then “tweek” the policies to try and achieve the goals set out.  So, for example, if buyers become upset and leave poor ratings for sellers when eBay starts sending out payment reminder notices to all eBay buyers after 48 hours  then eBay will review the information from the “testing period” and determine whether to change the amount of time before sending notices or whether to allow a seller to opt out.  But, in the meantime, all eBay sellers must participate in this “test”.

In 2008 eBay changed policies with little or no notice to sellers but eBay commited in 2009 that they were going to give sellers more advance warning.  Have they kept their word?  Well, today I reported that eBay is already deprogramming the optional insurance only one week after they made an announcement about insurance changes and about 8 weeks before the change is supposed to occur (see eBay Begins Removing Optional Insurance ahead of Schedule by clicking HERE ).  So eBay sellers were told they had 9 weeks to prepare but the changes are occurring after only 1 week.  And eBay announced today they are going to “test” the Top Seller program to determine how the new badge affects a seller’s conversion rates.  Henrietta of the redINKdiary wrote an excellent article titled Now eBay Tests Impending Changes  and in the comments section I pointed out that real sellers will be affected by this Top Seller badge “testing”.  These sellers were told they would not be affected until October but yet they could see their sales decline today as a result of eBay’s “testing”.

All of this “testing” on eBay got me to thinking.  Behavioral studies, tests that involve humans, are regulated by the government (click HERE here for some information) as well as all sorts of professional organizations.  For example, if a psychology professor wants to perform tests he or she must follow the law as well as the ethical guidelines established by professional psychologists.  

In the university studies I conducted we had consent forms that all participants had to sign.  Those who were participating in studies had to be informed.  They were told if there were any discomforts or risks, the time duration of the procedures and the study, and whether or not they were going to receive any compensation.  They had to sign a statement acknowledging that they were consenting to participate as a volunteer in the study.

Now, eBay would never conduct behavioral tests on their employees without their knowledge or consent.  It would illegal for eBay to perform tests involving workers’ compensation packages.  Yet eBay performs behavioral tests on their eBay seller “subjects” that affects people’s livelihoods and eBay’s actions in this regard would likely not be illegal (although I am certainly no lawyer).  That is because the eBay seller is not an employee and is not covered by labor laws.  Instead, a seller pays eBay for a service and if a seller believes they are not getting the service they are paying for then they can terminate the relationship at any time.     

eBay proudly states that they have no inventory and that they would never compete with their sellers.  So, this makes eBay a service company that receives the majority of their revenue from eBay sellers.  In the past eBay has always had an abundance of sellers because (1) there was money to be made on eBay and (2) eBay had no competition.  But today, making money on eBay is increasingly more difficult for non-Diamond sellers and there are numerous other sites where sellers can go to set up shop and/or sellers can create their own webstore with little investment today.   Combine these with the fact that eBay is continually conducting behavioral experiments on its sellers while eBay tries to figure out how to best transform their platform.  But just because eBay can conduct these tests doesn’t mean that they should conduct these tests on eBay sellers.  And even if eBay feels that they have no other way to make good decisions but to test their ideas on sellers, eBay should at least stick to the timetable they commit to publicly so that sellers have time to adjust their business strategies.  It is socially irresponsible for eBay to do otherwise.

During my MBA program studies, I was required to take a course called “Ethics and Social Responsibility”.  At the end of the semester I was convinced that social responsibility and profitability were not mutually exclusive.  In fact, over time socially responsible companies often significantly outperform the socially irresponsible ones. 

Now, I acknowledge that eBay has a responsibility to its investors.  No question about it; eBay has to make decisions that will benefit investors.  But I would argue that when eBay makes decisions that harm the other stakeholders (such as eBay buyers and eBay sellers) that they are being social irresponsible.  And, in 2009, a socially irresponsible service company who harms its revenue-generating base of stakeholders is going to have an untold number of negative stories being disseminated on the web and going viral.  Social media is a socially irresponsible company’s worst nightmare.

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One Response to “Social Media is a Socially Irresponsible Company’s Worst Nightmare”

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Labeling ebay as “socially irreponsible” is no different than calling Exxon’s refusal to clean up the Alaskan coastline or Union Carbide’s refusal to make responsible restitution in Bhopal “socially irresponsible.”

What it is in all three examples is criminal. Ebay is an ethics free corporation run by narcissistic sociopaths that steamrolls over and gleefully crushes hard working entrepreneurs by the thousands and then laughs all the way to their tax free offshore bank.

People with business ethics and consciences can’t work for ebay. Pierre Omidyar long ago abdicated his responsibilities to the B School sharks, sat back until the water turned blood red, and then escapes to paradise to start his atonement charitable causes.

John Donahoe is one of if not the most hated corporate executives in world including his deplorable counterparts in the health insurance industry.

There will be consequences.

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