Reference no: EM133309425

The well-known online auction site eBay allows sellers and buyers located anywhere in the world to deal with one another. But eBay itself is not a party to any transaction and, in general, does not assume responsibility for problems that arise between buyers and sellers. So what happens when problems arise?

In 1999, eBay decided that having a dispute-resolution process might improve trust between buyers and sellers. At that time, eBay selected a new Internet start-up named SquareTrade to be its dispute resolution provider. SquareTrade usually follows a two-step process. It generally begins with a technology-supported negotiation process in which parties try to resolve the dispute themselves. If this process fails, it provides a human mediator for a modest fee. The conversation between the buyer and seller is facilitated by the mediator using a web interface. Because the parties are using the web, they do not need to participate at the same time.

Most people who file complaints with SquareTrade have already tried to negotiate by email and have reached an impasse. Negotiating via the web appears to be more successful than email, and the parties also appear more willing to communicate. One reason is that the SquareTrade website provides more structure than traditional email. SquareTrade discovered early that eBay disputes tended to fall into eight categories, which allowed them to create forms that clarify and highlight areas of disagreement and possible solutions. The parties still have an opportunity to describe concerns in their own words. However, the forms and the form summaries reduce the amount of free-text complaining and demanding, thereby lowering the degree of anger and hostility between the parties.

QUESTIONS

1. What role according to you ebay plays in this scenario?

2. Does this experience of parties in concern reinforces the idea that the third party's control over the process and structuring of the communication can facilitate resolutions? Explain your answer highlighting the advantages and disadvantages of third-party facilitation of dispute resolution in this case.