They were using iframes to drop cookies on visitors computers without them actually intending to go to eBay - or even being aware that they had "visited" eBay at all. This is against the ToS, but isn't necessarily a crime.

The crime was their attempts to obfuscate and hide the activity so that eBay could not legitimately tell if they were doing so against the ToS. Fraud includes intentionally deceiving someone in the context of an agreement, statement or contract (iirc). They got caught because they made a long-running habit of hiding their illicit activity to a degree which made them guilty.

I'm assuming it would be a hidden iframe and then trigger an actual click on an ebay affiliate link, so it would appear the user has clicked the link.

Your hypothetical scenario is actually showing products.

According to the article, it seems eBay's gripe was that once the cookie was placed, the transparent .gif on their homepage was never triggered, so these affiliates were not sending traffic to eBay, but randomly waiting for these eBay users to purchase something from eBay.

This method was actually used by several successful affiliate marketers, now considered "industry veterans", in the early 2000s for Amazon.com and other big affiliate marketing programs.

It would eventually get one kicked out of the affiliate program and the violator would not receive any of their commissions, but this is the first I have heard of the FBI federally prosecuting affiliates for cookie stuffing.

From my limited understanding of cookie stuffing you are trying to get the ebay cookie on someone's computer without them knowing and without actually promoting anything for ebay. In your example you would actually be promoting ebay products although i'm not sure if that is sufficient to be legit. Haven't looked at the ebay affiliate terms in a while but you might be limited to placing cookies only when they click through in a link.

Yes, this entire story makes no sense. They just attacked their own affiliate base and tried to paint it as a good thing.

Did these two people featured in the story do anything that was against US Federal law? Did they violate the eBay affiliates agreement (and that can't result in criminal charges anyhow)?

I've read through all three pages of the story twice, and all I'm seeing is eBay wanted to have their cake and eat it too. They even conspired with these two to help generate more affiliate revenue which eBay admits to.

Sounds a lot like another Aaron Schwartz-type pile of bullshit to me. eBay is going to enjoy their exodus of affiliate salesmen.

Their widget did not advertise eBay at all, and when clicked it lied to eBay claiming someone clicked a eBay ad, when the person probably only wanted to see the widget about page or something like that.

- If the iframe is visible = legally ok, but probably against TOS of Ebay's affiliate program as you can/should/may only place their stuff on _your_ pages

- If the iframe is invisible = fraud

What lands you in prison is not the cookie or the iframe.

What lands you there is defrauding eBay of $20 million.