October 11, 2005

EBay tightens policing of stun-gun sales in New York

NEW YORK (Reuters) - U.S. No. 1 Internet auction company
eBay Inc. has toughened up its policies blocking sales of stun
guns to residents of New York state, after an investigation by
the state's attorneys.

The move, reinforcing a state law that bars citizens from
possessing electric-shock weapons, is a small blow for leading
manufacturer Taser International Inc., whose shares dropped to
a near-two-year low. Shares of eBay also fell slightly.

"We've worked with the New York Attorney General's office
to provide them with information on people that were breaking
their state laws as well as to make adjustments to how we
message what our policy is to eBay users," said Hani Durzy, an
eBay spokesman. "We don't want people using eBay for illegal

The move was welcomed by New York Attorney General Eliot
Spitzer, who said in a statement that it "will help ensure that
the Internet is not used to facilitate illegal activity."

New York is one of only seven U.S. states that ban
electronic "stunning devices." Sales of such weapons, which are
used by many law enforcement agencies nationwide, are legal in
most of the country.

Extending its usual procedures, eBay will now send an
electronic pop-up message to anyone from New York bidding on a
stun gun warning that the transaction is illegal in the state.

Ebay's published guidelines for members now also make it
clear in which states it is illegal to buy or possess a
stun-gun device.

The company's move comes after talks with the attorney
general's office, following an investigation by state attorneys
in Rochester, New York, into the brisk trade of stun-guns on
eBay to state residents.

Posing as ordinary consumers, the investigators bought 16
stun guns from 16 different sellers through the eBay auction
Website. Together, those sellers sold more than 1,100 stun guns
to New York residents between September 2003 and August 2005,
Spitzer's office said.

The Attorney General's office said it would fine the
sellers and agreed with them to cease sales to New Yorkers.

Taser shares fell 17 cents to $5.73 on Nasdaq. They hit a
two-year low of $5.37 on Monday. Ebay shares fell 5 cents to
$40.41, also on Nasdaq.