Online retailers like eBay claim proposed laws aimed at fenced goods for sale on the Internet are blatantly discriminatory against online business models. With three sweeping bills, big box retailers like Wal-Mart, Target and Best Buy are seeking the authority to bypass law enforcement agencies and directly send take-down notices to online marketplaces. Brick-and-mortar merchants also want anyone selling more than $12,000 worth of goods a year online to keep detailed records of their transactions. All this, they claim, will put a dent in organized retail crime.
Online marketplaces are crying foul and claiming big box
retailers are attempting to cripple competition from the Internet through
legislation aimed at curbing the sale of online fenced goods. Brick-and-mortar
retailers counter they routinely find hot goods for sale on sites like eBay and
Overstock.com.
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Increasingly, big box retailers claim, the goods showing
up online are part of efforts by organized retail crime groups to expand their
black markets beyond pawnshops, flea markets, garage sales and classified
advertising. "Clearly, these [online] products have been either stolen or
fraudulently obtained," the Coalition Against Organized Retail Crime told
the House Judiciary Committee last year.
To counter the threat of fenced goods, retailers such as
Wal-Mart, Target, Safeway, Best Buy and Walgreens are pushing Congress to
approve legislation that would effectively allow the retailers to skip the police
and simply issue take-down notices to sites such as eBay.
The legislation, which is a
package of three bills (H.R. 6713, 6491 and 3434) that will be debated at a
Sept. 22 hearing of the House Judiciary Subcommittee on Crime,
Terrorism and Homeland Security, would also require online sellers who gross
more than $12,000 a year to keep detailed records on those they do business
with.
"Granted,
most sellers utilizing Internet auction sites are honest individuals who are
not trafficking in stolen or fraudulently obtained goods, but a significant
number of sellers are clearly not reputable," maintains the Coalition
Against Organized Retail Crime. "If just a very small percentage of sales
from Internet auction sites involve stolen or fraudulently obtained merchandise,
that's thousands of illicit transactions each and every day of the year, which
illustrates the magnitude of this problem."
Blaming
the online marketplace for brick-and-mortar businesses that can't control
their inventories is "like blaming the back seat of cars for causing
teenage sex," said Steve DelBianco, executive director of NetChoice, a coalition of consumers,
e-commerce merchants and trade associations.
"All
this blame-shifting has only one objective: taking law enforcement out of the
loop," said DelBianco. "These bills would impose extraordinary and
discriminatory restrictions on Internet marketplaces that help millions of
people to legitimately buy and sell products every day at big discounts."
Currently,
brick-and-mortar merchants must file a police report about suspected hot goods
and law enforcement agencies do the follow-up. The proposed legislation would
make it a crime if an online marketplace doesn't pull listings when a competing
retailer claims it has evidence of theft. The bills would also require online
merchants to conduct investigations if a brick-and-mortar merchant provides a
police report dated any time within the past 12 months claiming theft.
The legislation would also target the "high-volume" sellers of online goods by requiring them to keep detailed records
about where they obtained the goods. The proposed laws define a high-volume
seller as anyone who in the past 12 months has made or offered to make
transactions aggregating at least $12,000.
"These bills are blatantly discriminatory against
online business models," said Catherine England, a spokesperson for eBay,
noting the legislation would not apply to flea markets, classified advertising
or pawnshops. "Selling stolen goods anywhere,
online or on the street corner, is already illegal so the point of the proposed
legislation is more about limiting competition."
As for the reporting requirements for high-volume sellers, England said a recent eBay survey of its members showed 750,000
people who are "making all or a significant portion" of their income
through online selling.
"Small, independent sellers do compete with large retailers and
they do put pricing pressure on them," she said. "They should be
subject to harassment for doing that. In our view, organized retail crime can
only thrive only to the extent they're allowed to walk out the front
door."
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