Monday, April 17, 2006

eBay tricks Louisiana sellers

(Wow! Three posts in one day!)

Earlier today I discovered I had a message waiting for me on my eBay account. Here's the message:
Louisiana sellers - Protect your right to sell items on eBay

Dear Community Member,

If you sell more than two items a year on eBay, the Louisiana Auctioneers Licensing Board wants to force you to be licensed as auctioneers or auction businesses. You may have to pay a licensing fee, obtaining surety bonds, and submit a notarized copy of your voter registration card. All this just to sell a few items on eBay!

Nearly every eBay seller in Louisiana is at risk. One Louisiana seller already shut down his eBay business. Unless we act quickly, thousands more Louisiana businesses may be at risk.

Protect your right to sell items on eBay. Make your voice heard! Write your elected representatives today!


eBay's Government Relations team

I was immediately suspicious of the post because there was a link on the "Write your elected representatives" part that led to a site that wasn't simply After Googling I found that the post was legitimate. It was the content that was... well, a little exaggerated.

Since last September, Louisiana's Auctioneers Licensing Board has been visiting businesses in Louisiana set up as an "eBay trade associate". These are businesses that sell items on eBay for other people for a fee. There's such a business in West Monroe called Webayit. They have been telling these businesses that they are in violation of Louisiana's auction laws. Apparently the law is loosely enough written that selling an eBay item online is the same as an auction, as defined by the law.

The law requires that auctioneers be licensed. Right now businesses that sell on eBay are not licensed. The fear is that these sites are perfect places for fencing stolen goods. There has been a big increase in stolen goods and counterfeit goods showing up on eBay, and these trade associates are perfect "laundering" companies.

I did some digging online. According to the Shreveport Times, the Louisiana Auctioneers Licensing Board is asking that eBay trade associates be licensed at a cost of $300 (not sure if that's a year; probably). They would also have to put up a "surety bond", which would require an additional $50 to $100. eBay doesn't want this. They have a large number of people who use their site as a secondary business, a cottage industry. They fear that people using eBay as a side line will simply quit, especially if their business doesn't bring in much money. The Shreveport Times article has two examples of people who got out of the eBay business out of fear of the Louisiana Auctioneers Licensing Board.

Personally, I can't understand why a potential $400 fee per year — which is tax deductible — would be enough to drive people out of business. I suppose if you are only making $1000 a year it's not going to be worth your while.

What really bugs me is the fear tactics used by eBay. They suggest that anyone selling more than two items per year would be susceptible to this law. That's not the case. The Licensing Board even had an eBay representative present when they discussed this issue last year, and they made it very clear that they are only going after the 460 trade associates in Louisiana, not the rest of us who sell a few items a year, especially if those items are things we own or make ourselves.

eBay hired a Louisiana lobbyist, and they have a state senator on their side (a Democrat, funny enough, not a Republican; Sen. Noble Ellington of Winnsboro). With the help of eBay members they were able to get legislation passed in Ohio that exempts eBay members from auction laws. Louisiana is the latest battleground. It is likely to be the template for other states. Ellington is looking for a compromise, exempting eBay trade associates from the auction laws but perhaps still licensing them as a regular business.

I don't think these trade associates need to be licensed as auctioneers. They aren't auctioneers; they aren't coercing people to pay additional money for an item. On the other hand, something has to be done to stop fencing through eBay. I'm particularly peeved at eBay for their distorted e-mail. I'm half thinking I should write our local representatives and tell them that I'm in favour of them licensing these guys, just to spite eBay!

Oh, right... I'm not a U.S. citizen and can't vote...

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