HAIFA
—What do you do if you sell
something on line and don't get your money? Where do you turn if you paid
for an original pink Chanel
suit in an online purchase, and a cream-colored, made-in-Hong Kong knock-off
is delivered to your door?
Colin Rule, Director of Online Dispute Resolution (ODR) for
eBay and Paypal, told a
University
of
Haifa
audience yesterday how eBay, the world's largest online market place,
resolves such problems. Paypal is an account-based system that allows
anyone with an email address to securely send and receive online payments
using a credit card or bank account. It is the most popular way to
electronically pay for eBay purchases.
Speaking from
California, Rule was the keynote speaker in a videoconference devoted to this new
field of dispute resolution and technology.
The event was sponsored by the Israeli institution's Faculty of Law.
ODR,
Rule joked, was a terrible acronym. Nevertheless, this relatively new
industry—it is only six to seven years old—is growing at a rate of 30% a
year. It developed out of face to face dispute resolution, where he
had his own start.
As commerce hit the internet from 1995 to 1997, Rule realized there was no
intersection of technology and conflict resolution. A system had to be
created to redress disputes. The problem, he explained, was that courts were
specifically bound by geography and jurisdiction. "There are no
e-judges, e-policemen, or e-jails," he kidded, though indicating later
that there might be
a future with "robo-judges."
His initial attempts with ODR met with skepticism. "You
have to be in the room with them and look them in their eyes," he was
told.
But ODR offered certain advantages, like archived
communication. The entire interaction is text-based and the language is
reusable, Rule pointed out. For example, if someone originally asked a price
of $1,000, and then reneged on the deal by demanding $2,000, the specific
text can be shown to the seller. This is a very powerful and persuasive tool
of ODR, Rule offered.
Another advantage is "asynchronous
interaction." The term
implies that the parties to the dispute do not have to react immediately.
The sides have a chance to cool off. This,
Rule thought, was useful in preventing unnecessary escalation.
He
acknowledged, though, that the lack of personal communication was a serious
disadvantage to online conflict resolution. Fifty
percent of meaning we communicate through body language and non-verbal
communication, Rule said, adding that an apology in an email is not the same
as a warm, heart-felt, eye to eye apology.
It is also much easier to drop out of or simply stonewall the ODR process.
In face to face resolution, he asserted, there were consequences to walking
out of the room. In ODR, simply ignoring an email was much easier.
But that also meant there was less personal accountability.
The
highly visited and highly utilized eBay has 185 million users. It is, he
revealed, the largest used-auto dealer in the world, among other things. eBay
is a marketplace. It does not buy or sell anything. It holds no inventory,
the ODR expert reminded his
University
of
Haifa
audience. Still, it has to deal
with disputes in some manner, he said, explaining that it often has to act
as referee.
When
Rule started working at eBay, he changed much of the way disputes were dealt
with, as well as the terminology. Disputes were originally called
"deadbeat buyer disputes." He changed this highly negative
expression to "unpaid item dispute," which shifted the blame onto
the actual problem, not the person. Taking
the same tack, he recast "fraud alert process" to a more neutral
term, "item not received dispute."
Rule is proud of eBay's dispute resolution record for "items not
received" and for items "received significantly different than
described." He claims that 85% of the complaints are amicably resolved.
In addition, 10% are complaints about items costing less than $20 and do not
escalate. Only 5% actually make it to a claim, he stated.
No law suits have ever been filed against ODR companies, Rule said in answer
to a student's question.
ODR, he feels, has a broad future. Rule mentioned that the Hague Conference
on Private International Law is currently discussing where the jurisdiction
lies in e-commerce, in relation to the location of the buyer or seller.
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