Bills aim to give online auctions oversight to offline retailers

Mon Sep 29, 2008 1:20PM EDT

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If you believe the National Retail Federation, auction sites like eBay have turned law-abiding citizens into a den of thieves. The quote in this Ars Technica story from an NRF muckety muck almost made me spew my bear claw: "Thieves often tell the same disturbing story: they begin legitimately selling product on eBay and then become hooked by its addictive qualities, the anonymity it provides and the ease with which they gain exposure to millions of customers. When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online. The thefts then begin to spiral out of control and before they know it they quit their jobs, are recruiting accomplices and are crossing states lines to steal, all so they can support and perpetuate their online selling habit."

And thus we have a series of bills designed to do one thing: Let retailers get into the game when it comes to shutting down auctions they deem illegal.

The original intent may have been honorable. Organized crime obviously leverages the anonymity and convenience the web offers to move merchandise: It's a lot harder to get busted when you're thousands of miles away from a buyer than if you're selling a truckload of DVD players in a New York alley. Indeed, numerous Organized Retail Crime outfits operate large-scale operations, stealing consumer goods in bulk and redistributing them widely. (This is why everything you buy at Walgreen's has an unremovable sticker on it claiming it is only to be sold at that company's stores.)

The three new bills in question (read the Ars story above for their full IDs) are aimed at curtailing what may be a $30 billion operation... but smaller sellers are bound to get caught up in the onerous requirements and oversight the bills would require of online sellers.

For example: If you sell more than $12,000 worth of goods online in a year, a retailer can force the marketplace (that is, eBay) to determine whether the goods were obtained legally (through methods unknown). Another bill requires marketplaces to keep records of investigations for three years and maintain an extensive database of sellers, and raises penalties against organized crime operations. Finally, a third bill forces marketplaces to file "suspicious activity reports" with the Attorney General, all while keeping records of investigations secret from the people who are being investigated... and it can apply to anyone selling $1,000 worth of stuff a month. Kind of spooky stuff.

Right now the bills are still in Congress, and there's no telling how they'll fare as they wind their way through the system. But if you're a big eBay seller and don't want Big Brother breathing down your neck—and big retailers having your auctions pulled because you're undercutting their prices—you might consider a pointed letter to your local Congressperson.

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  • 1 Posted by alan_r_cam on Thu Sep 3, 2009 2:49PM EDT Report Abuse

    Will these laws cross international borders? If I buy something "from Hong Kong", I send money to a designated account. Then the goods turn up in the mail (hopefully). The parcel COULD be b sent from just down the street - I won't know until I check the postage. So, will EBay need to keep track of every international order? Good luck on that one.

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