"There's going to be, at some point in the next few years, a trigger point," Donahoe told a New York breakfast meeting organized by The Wall Street Journal, noting the need for "a national dialogue about what is acceptable or not."
Donahoe said it would be best for the industry to take "proactive" steps to avoid a backlash.
"It's going to be necessary for us to have some national dialogue on privacy, so we don't have a clash point and they over regulate and slow down innovation," he said.
He said eBay's business model does not revolve around monetizing data but that this has become a greater concern for Web companies.
"We won't share your information with anyone else, but I think there are huge opportunities to use data, to customize the experience, to personalize the experience, and if you choose to share with others, it can make the experience even better," he added.
Donahoe said users of eBay should know that "there's no absolute guarantee of privacy" for illegal activity and that "we can't stop a court order."
"We comply with the laws of the lands we operate in and we don't operate in lands where we wouldn't feel good about the laws," he added.
For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.