Cookie-Stuffing Could Land eBay’s Top Two Affiliates In Jail

ebay-logo-240pxBusiness Insider has an interesting and in-depth article about the ongoing legal cases that could land eBay’s two biggest affiliates in jail soon on charges of wire fraud.

If you’ve been in the online marketing industry for a while, you may recognize the names Shawn Hogan and Brian Dunning. They’re the two affiliates that eBay and the FBI started pursuing in 2006 after suspecting that they were earning millions while violating eBay’s affiliate terms of service.

According to court documents, Hogan made an astounding $28 million in affiliate commissions from eBay, and Dunning made $7 million. One way they did it, according to the FBI, was by using widgets that stuffed eBay tracking cookies in Web browsers.

The two widgets spread themselves far and wide, as amateur bloggers and web page creators installed them to look at where their traffic was coming from. Hogan’s widget stuffed 650,000 eBay cookies, according to eBay’s civil complaint against him. Dunning’s widget stuffed 20,000.

The obvious problem was that neither widget did anything overt to encourage people to buy stuff on eBay. Hogan and Dunning got paid by coincidence. So many random users were carrying their cookies that some of them inevitably ended up on eBay.

The article goes on to explain how eBay uncovered the cookie stuffing, and details some of the FBI’s discoveries when the agency served warrants at Hogan’s and Dunning’s homes. The two men both told the FBI that eBay employees — who were happy with how much traffic and sales the widgets were sending to eBay — knew about the cookie stuffing and encouraged both to keep doing it despite being against the rules. But neither was able to produce any evidence to that effect.

According to Business Insider, both Hogan and Dunning recently pleaded guilty to one count of wire fraud. They each face up to 20 years in jail, but could get lighter terms because this is a first offense.

As I said, the whole article is an interesting read, whether you’re involved in affiliate marketing or not.

Related Topics: Affiliate Marketing | Channel: Content Marketing | Internet Marketing Industry | Legal | Legal: General

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About The Author: is Editor-In-Chief of Marketing Land. His news career includes time spent in TV, radio, and print journalism. His web career continues to include a small number of SEO and social media consulting clients, as well as regular speaking engagements at marketing events around the U.S. He recently launched a site dedicated to Google Glass called Glass Almanac and also blogs at Small Business Search Marketing. Matt can be found on Twitter at @MattMcGee and/or on Google Plus. You can read Matt's disclosures on his personal blog.

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  • Pat Grady

    $35M stolen is incongruous with “could get lighter terms because this is a first offense”.

  • Matt McGee

    $35 million is the total that the two say they made from being an eBay affiliate. It’s apparently not what they made from the cookie-stuffing.

  • Pat Grady

    Are you saying some legit sales were mixed in there, meaning the illegit is less than $35M (they’ve said how much was illegit, so I think you mean something else)?
    Or are you saying that the $35M is just the eBay damage, that surely they did this others, making the $35M just a fraction of their damage done?

  • Pat Grady

    Hypothetical question… with this going down, and GAN pulling the plug with zero notice, anyone think there’s a chance GAN did some similar testing, saw their network was full of Hoganesque timed toolbar touches (and worse), then decided, as the folks making more and more attribution tools that we all use, that what formerly looked attractive, suddenly was an ugly duckling?

  • DPSucks

    Yep, wire fraud is a bitch! ;) See Shawn’s jail photo here: http://dpsucks.com/why-shawn-hogan-is-going-to-jail.html

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