Case Report – Appeal in eBay PowerSellers case dismissed

On November 11th, the Federal Court dismissed an appeal in the eBay “PowerSellers case.”  

This was an appeal of eBay’s unsuccessful application to vacate a production order made under section 231.2 of the Income Tax Act. The order required two Canadian eBay subsidiaries to produce data about specific Canadian eBay users that resided on servers operated by eBay’s American subsidiary in the United States.

The Court of Appeal held:

  • that the data sought was not “located” in the United States (and therefore subject to different production power) given eBay Canada’s right of access to the information and ready means of gaining access to the information;
  • that it should not depart from its recent decision in Greater Montreal Real Estate Board, where it held that an production order seeking access to information unnamed persons under section 231.2 may be granted if the information is “required to verify compliance with the Act by one or more unnamed persons in the group” or that “the information is required for a tax audit conducted in good faith”; and
  • that the motions judge did not err by failing to give notice to eBay US and eBay International, who were said by eBay Canada to “own” the records and information in question.

Hat tip to Michael Geist, who provides his views on the case here.

eBay Canada Limited v. Minister of National Revenue, 2008 FCA 348.

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