The head of eBay's subsidiary Baazee.com in India was released on bail on Tuesday after he was arrested over a controversial video listed on the site. The arrest of Avnish Bajaj propelled the scandal involving a video of two Indian students into the international spotlight.

eBay said it was "outraged" at the arrest, issuing a statement that the listing in question violated Baazzee.com's policies and user agreement, and the company removed the listing from the site once it was discovered.

Country manager Avnish Bajaj had been cooperating with the New Delhi police to trace the seller in question, providing information that allowed the police to locate and arrest the seller, according to the statement.

Bajaj is an Indian-born U.S. citizen and attended Harvard Business School, and Washington is closely watching the case, according to reports. Technology leaders in India are also concerned over what the case means to the growing tech sector.

While eBay is held as one of the most successful models to come from the birth of Internet commerce, it is not without problems, including misrepresented items, fraud and hoaxes.

Listings in violation of eBay's policies are pulled from the site if and when reported. When a New York City housing judge was posted for sale on eBay's U.S. site earlier this month, a company spokesperson told the New York Times it relies on "our traders and the public" to point out listing violations. He said eBay does not screen every listing before posting to its site due to the volume of listings. Instead, eBay uses computer filters to identify improper items and advertisements, though the filters are not foolproof, he said.

Related articles from other sources:

http://timesofindia.indiatimes.com/articleshow/966575.cms

http://economictimes.indiatimes.com/articleshow/966281.cms