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States Planning to Require License to Sell on EBay

Zonk posted about 9 years ago | from the free-enterprise-never-is dept.

Businesses 274

RobMowery writes "CNN reports that North Dakota and other state governments are trying to pass laws to require people who are selling for others on Ebay to purchase an auctioneer license, attend classes (for a fee) and become bonded." From the article: "North Dakota's Public Service Commission is exploring whether people like Nichols, who runs a small consignment store in Crosby, must obtain auctioneer licenses before they can legally use eBay to sell merchandise for others. Regulators in other states are also eyeing similar restrictions or preconditions, moves prompted by the growing popularity of online auctions. To get a North Dakota auctioneer's license, applicants must pay a $35 fee, obtain a $5,000 surety bond and undergo training at one of eight approved auction schools, where the curriculum includes talking really fast ... Commissioner Kevin Cramer said he does not believe the law applies to people who sell their own goods over eBay, but it could cover those who sell property consigned by others for a fee."

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Key word is Consignment (3, Interesting)

Buzz_Litebeer (539463) | about 9 years ago | (#13793512)

I think this is a good idea. These individuals are running an auctioning business by taking peoples items for consignment. As long as it does not spread to those just selling their own private goods, this seems like an incredibly good idea.

It provides protections to the people who give their goods over for sale, as well as provides a link to the individual that is selling, and a person can prove that they are a bonded seller as well.

Obviously the classes would have to change slightly for internet retailers, mentioning talking fast is sort of moot if this were to go ahead.

But... (1)

RedNovember (887384) | about 9 years ago | (#13793558)

But how can you ensure that it remains resellers only? I don't trust politicians with this, they always take it too far. I for one do not welcome our blundering politician overlords...

Re:Key word is Consignment (3, Funny)

mopslik (688435) | about 9 years ago | (#13793566)

Obviously the classes would have to change slightly for internet retailers, mentioning talking fast is sort of moot if this were to go ahead.

Bah, piece of cake.

"Thankyouforpurchasingyouritemsatourstore, wereallyREALLYappreciateyourbusiness..."

Thank you, Mavis Beacon!

Re:Key word is Consignment (4, Insightful)

AviLazar (741826) | about 9 years ago | (#13793567)

While I agree it is good for those who are doing this as a business (consignments) - it WILL move on to other things. Also, it will be hard to regulate.

It will also provide a new source of tax revenue, which is the main reason the gov't wants it.

It will cause some issues:

That $35 fee does not pay for the classes, which can be hundreds. And that surety bond - unless you are part of a company, you may have to front that money...that is a barrier to entry and not a lot of people can afford it. THe great thing about consignment on eBay is that you could get in for free.

Re:Key word is Consignment (5, Insightful)

Tackhead (54550) | about 9 years ago | (#13793632)

> While I agree it is good for those who are doing this as a business (consignments) - it WILL move on to other things. Also, it will be hard to regulate.

"Did you really think that we want those laws to be observed?" said Dr. Ferris. "We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against - then you'll know that this is not the age for beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens' What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted - and you create a nation of law-breakers - and then you cash in on guilt. Now that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with."

- Ayn Rand, Atlas Shrugged

> It will also provide a new source of tax revenue, which is the main reason the gov't wants it.

Close, but not quite.

> That $35 fee does not pay for the classes, which can be hundreds. And that surety bond - unless you are part of a company, you may have to front that money...that is a barrier to entry and not a lot of people can afford it. THe great thing about consignment on eBay is that you could get in for free.

Now you've got it. The "great thing" is only "great" to people like the buyers of products on eBay (who want more goods to purchase from a wider array of sellers) and to people who want to get into the business without having to pony up a few grand of protection money (oops, "to take classes on how to talk fast!") to line the pockets of people who are already well established.

In a free market, anyone can enter. If you give enough money to your politicians, however, you can have him erect artificial barriers to your competition, turning a formerly free market into a cartel, or guild. A capitalist doesn't fear competition -- but sadly, owning a small business doesn't turn you into a capitalist any more than going into a garage makes you a car.

You're arguing that there are no free markets (2, Interesting)

brokeninside (34168) | about 9 years ago | (#13793765)

`In a free market, anyone can enter'

In the real world, all markets have barriers to entry, chief of which is capital. The so called barrier of entry you're referring to is, practically speaking, no more a barrier to entry than being required to pony up an equivalent amount of cash to start a vending route or to beer making equipment, or any other business that requires investment.

`owning a small business doesn't turn you into a capitalist '

That much is correct. Capitalism is a theory of production, not a theory of retail or professional services. A business owner is only a capitalist inasmuch as he or she owns the means of production. Many businesses don't produce anything in the sense of the word used by economists.

But let's be objective about this. Show me a single market of concrete goods for which all the assumptions of perfect competition hold. Once you are able to do that, then we talk as to whether a license to sell things on consignment is anymore of an artifical barrier of entry than any of the other barriers of entry (such as a lack of money) to most markets.

Re:Key word is Consignment (2, Insightful)

Reziac (43301) | about 9 years ago | (#13793750)

"It will also provide a new source of tax revenue, which is the main reason the gov't wants it."

Exactly. North Dakota's state gov't is one of the most internet-savvy in the entire nation (there is almost no county, town, agency, or department, no matter how small, that doesn't have its own well-managed website). So I find it very hard to believe that this is being done from ignorance of what eBay IS, or how eBay differs from traditional meatspace auctions (which are still commonplace in ND).

Small businesses in ND just don't have the revenue base to shell out for this sort of thing, so what will happen is that 3rd party eBay consignments will simply go away.

BTW, Crosby ND is a farming town with a population of 1043 people, and is over 200 miles from the nearest city of any real size. I'm sure it must be a major hotbed of consignment sale fraud. ;) html []

Re:Key word is Consignment (3, Insightful)

RexRhino (769423) | about 9 years ago | (#13793638)

How does it provide protections to people who give their goods over for sale? Please explain it to me.

Just because the state charges a $35 dollar fee and requires some classes (from the same people who are lobbying for the class requirements), doesn't mean that there is any infrastructure in place to protect consumers. All it means is that people have paid $35 and took a class.

And why are states so concerned about "protecting" people who gives things on consignment for auction (which there isn't a whole lot of), but refuse to get involved when ebay sellers are involved in all out scamming? It seems to me if this was about protecting people, they would go after the biggest and most desctructive criminals first. This just seems like a way to charge a new tax, and to protect the market of established auctioneers.

Re:Key word is Consignment (2, Informative)

thesandtiger (819476) | about 9 years ago | (#13793729)

They'd have to be bonded - that's the protection.

Bonded? Yeah, right... (1)

aquarian (134728) | about 9 years ago | (#13793789)

So now you have to sue a bonding company to get paid, and believe me, they can afford better lawyers than two-bit junk dealers.

Re:Key word is Consignment (1)

Rob the Bold (788862) | about 9 years ago | (#13793644)

I don't think that most consignment shops in most states have an Auctioneer's License requirement, whether they sell the consigned items directly from a (brick) storefront or online through eBay. In neither case are they "auctioning" anything. I've bought and sold items on eBay, and if any party in the transaction could be called an Auctioneer, it would be eBay itself. Calling an eBay seller an Auctioneer, whether or not they are the owner of the item, is a misapplication of the term Auctioneer ("One that conducts an auction." -- American Heritage Dictionary).

Re:Key word is Consignment (4, Insightful)

rolfwind (528248) | about 9 years ago | (#13793645)

Are you talking out of your ass?

Especially if this is a state by state law, it will become a patchwork of licenses here and there, unenforceable and the seller's will just relocate their "location" on ebay to a friendly state. Like a scammers do with Utah or Florida. Or Washington D.C.:-)

I actually did selling on ebay, as well as buying where I got burned - so I looked into it.

Most of the fraud done on ebay are by low volume sellers who build up their feedback to somewhere in the double-digits and then pull either a high-priced scam, or probably more likely a dump a bunch of lots (medium priced, say computers for a low price) and never deliver.

Common sense is the best defense in this case, buying from someone that has an internet presence besides ebay (like a website) and that has a high feedback (over 200) that won't likely jeopardize it.

If this starts passing left and right, it will kill small business, or they'll move from ebay (I hate ebay, I don't care if they lose money) into their own website and just sell the stuff for a fixed price. In fact, they can do that now on ebay too.

Nowadays, when government usually do something (and other local governments want to be fast on the heels to follow), it's not for the good of the people, it's about control and increasing the revenue stream. I wonder if this is the first step toward greater taxes applied to internet selling, since they'll get the consignors listed on paper.....

Re:Key word is Consignment (1)

Buzz_Litebeer (539463) | about 9 years ago | (#13793698)

Hmm, My ass wasnt particularly making any noise that I know of.

This will not kill small business, even though it is a blatant attempt at tax revenue, people that give their items over for consignment will have one more avenue to attack those that take advantage of the situation.

Re:Key word is Consignment (5, Insightful)

JesseL (107722) | about 9 years ago | (#13793647)

Is there currently a problem with people who are consigning goods on ebay? If there is, is this any better than prosecuting the problem individuals? Just what real protection does it provide?

The government should stay out of everything as much as it possibly can. Almost every time the government gets involved in something unnecessarily, it is simply because someone sees an opportunity for more graft, the rest of the time it's because they are acting like overprotective parents.

Re:Key word is Consignment (1)

deanoaz (843940) | about 9 years ago | (#13793776)

>>> There is no worse tyranny than to force a man to pay for what he does not want merely because you think it does him good

I like that! Is it yours?

Re:Key word is Consignment (1)

JesseL (107722) | about 9 years ago | (#13793851)

Nope, not mine, it's slightly paraphrased (to fit within the 120 char sig limit) from "The Moon is a Harsh Mistress" by R.A. Heinlein.

The original quote is: "There is no worse tyranny than to force a man to pay for what he does not want
merely because you think it would be good for him."

Re:Key word is Consignment (1)

bypedd (922626) | about 9 years ago | (#13793714)

True, but they said it *probably* wouldn't affect individuals selling their own items. Given the money eBay has been making off of sellers, I wouldn't be surprised if both the federal and/or local governments got in on the money - tighter tax laws, similar auction/small business requirements, etc.

Re:Key word is Consignment (1)

Trix606 (324224) | about 9 years ago | (#13793737)

Interesting. The article doesn't mention if non-eBay consignment shops will also be forced to attend these classes. I would think they would not since it is conducting the sales via eBay that involves the auctioning.
To my mind the only entity that would be required to take the class would be the eBay company itself since they are conducting the auctions.
The whole thing sounds more like a quest for additional state revenue rather than for better consumer protection.

Re:Key word is Consignment (1)

robertjw (728654) | about 9 years ago | (#13793780)

I think this is a good idea. These individuals are running an auctioning business by taking peoples items for consignment. As long as it does not spread to those just selling their own private goods, this seems like an incredibly good idea.

First, these individuals are not running an auctioning business, they are running an ebay consulting business. Where I live, there is no license requirement to have your own business. If I am running a service/consulting type business and not reselling anything, I don't need any license at all. I can do business as a sole proprieter under my name, there is no need for a sales tax license or anything.

Don't kid yourself. This is just another venue for greedy state governments to get their fingers into the pockets of honest entrepenuers and squash small business. These laws will probably pass just because their aren't any ebay resellers with enough money to lobby the state legislatures. It's a sad thing when our governments only listen to big businesses, but crush small businesses as soon as they become economically viable.

Re:Key word is Consignment (1)

Se7enLC (714730) | about 9 years ago | (#13793815)

Obviously the classes would have to change slightly for internet retailers, mentioning talking fast is sort of moot if this were to go ahead.

So the equivalent would obviously be a typing test!

Or better yet, an eBay-auction-snipe-off!

Re:Key word is Consignment (2, Insightful)

ChrisGilliard (913445) | about 9 years ago | (#13793869)

Even for consigners, why do we want this waste of time class? This will only raise the price of buying things online for consumers. I can't understand why we'd want to have this. Ebay's solutions to the problem (customer feedback, power sellers, etc) are far superior internet age solutions than this 1900's solution that the government is proposing. I seriously hope this is rejected strongly.

Re:Key word is Consignment (1)

cayenne8 (626475) | about 9 years ago | (#13793870)

I'm thinking if challenged...would this not be struck down as something to restrict interstate commerce? This is on the internet after all...over state AND country lines.

"As long as it does not spread to those just selling their own private goods..."

I'm with some of the other posters here...I don't trust the gov. NOT to do something, unless it is specifically written into the bill. This is not only a way to regulate something that doesn't need it, but, just another way to collect a new tax on people trading online. They just can't stop thinking of new ways to generate revenues from us, can they?

Someone missed the mark? (1)

ReverendLoki (663861) | about 9 years ago | (#13793909)

I'm not going to dispute whether an auctioneer needs a license or not if they take their trade online. However, what they are talking about here - people who take items on consignment to be sold via eBay, or otherwise sell things ofr others on eBay - just doesn't seem to fit the role here. Maybe I'm being too much of a nit-picker, but isn't eBay the auctioneer here? The consignment guy is just acting like a go between, while eBay is running the auction. I can see some wisdom in requiring eBay to register as a valid auctioneer in that state in order to conduct business in that state.

I'm having trouble picking out a real-life equivalent to these consignment operators.

new curriculum needed, then (4, Insightful)

ChristTrekker (91442) | about 9 years ago | (#13793513)

Those schools should be required to add "online auctions" as a class.

Not saying that I agree with this, but if you're going to force the online guys to learn the auctioneer rap, the auctioneers better learn how to navigate eBay and similar systems. If the pretense for passing this law is being fair and equitable, then it had better be.

Re:new curriculum needed, then (1)

KiloByte (825081) | about 9 years ago | (#13793564)

Hell yeah, especially if you consider: the curriculum includes talking really fast.

See, I'm typing really slow now to make sure you can understand me.

circumvent (1, Funny)

Broken_Ladder (821456) | about 9 years ago | (#13793516)

So I'll be selling via on off-shore account. Great.

We Vote For these People? (4, Insightful)

nate nice (672391) | about 9 years ago | (#13793520)

It's amazing that we, the people, actually vote for people that are willing to do this. Note to politicians: Learn how to balance a budget like 99% of the country has to! Stop spending on crap and realize you cannot keep quietly taxing us. This is living free?

Re:We Vote For these People? (0)

Anonymous Coward | about 9 years ago | (#13793590)

Troll???? Sounds like a legit gripe to me.

Re:We Vote For these People? (1)

Quill_28 (553921) | about 9 years ago | (#13793592)

You do know that most Americans never do a budget correct?

I believe they should but that is another story.

Re:We Vote For these People? (1)

Hognoxious (631665) | about 9 years ago | (#13793814)

You do know that most Americans never do a budget correct?
Or an adverb, if you're anything to go by.

Re:We Vote For these People? (1)

joliet convict (729787) | about 9 years ago | (#13793889)

Actually I believe punctuation was his problem. I think he meant:
You do know that most Americans never do a budget, correct?

Re:We Vote For these People? (1)

Hognoxious (631665) | about 9 years ago | (#13793918)

s/n adverb/sentence/ then. P.S. that was quick!

Re:We Vote For these People? (1)

DigiShaman (671371) | about 9 years ago | (#13793686)

You can never ballance the budget. Why, you ask? Because the moment government gets even CLOSE to that goal, they end up spending more tax dollars for themselves such as the highering of government employees and voting themselves a pay raise increase.

Oh ya, don't worry about it, they will find more ways to tax the rest of us to maintain and increase their power.

Government: The beast that never stops growing.

Re:We Vote For these People? (1)

Hognoxious (631665) | about 9 years ago | (#13793854)

"highering of government employees"

Call me naive, but I don't see what they would gain from making civil servants walk around on stilts.

Re:We Vote For these People? (4, Funny)

bjtuna (70129) | about 9 years ago | (#13793873)

ballance the budget

the highering of government employees

Mr. President, is that you?

Great (0)

Anonymous Coward | about 9 years ago | (#13793521)

Government interferes with a free market in perfect working order to generate revenue.

Ok, so anyone who goes THROUGH an auctioneer too? (5, Insightful)

Puls4r (724907) | about 9 years ago | (#13793529)

Ok, someone who puts something on ebay ISN'T running the auction. Ebay is. The person placing the good on ebay sets the high price and reserve - but how is that any different than if you hire an auctioneer?

So does everyone who wants to hire an auctioneer now need a license to auction? How non-sensical is that?

This is, quite literally, a stab at taxing the internet.

Re:Ok, so anyone who goes THROUGH an auctioneer to (0, Offtopic)

hanshotfirst (851936) | about 9 years ago | (#13793576)

Mod parent up.

Why, oh why are the threads pointless when I have mod points, and when I really want to mod up, I don't have points.

Re:Ok, so anyone who goes THROUGH an auctioneer to (1, Insightful)

AviLazar (741826) | about 9 years ago | (#13793617)

Yea someone putting something on eBay is running an auction. They are requiring people who want to be consignment auctioneers. Basically, if you want to sell something on ebay - but you are terrible at marketing it - they will do all the work for you for a fee. So they are not asking Joe Schmoe who wants to sell his old sweater to get a license. They are not asking Joe Schmoe who wants to hire a consignment specialist to get a license...they are asking a consignment specialist to get a license. This is not uncommon. The difference between a traditional consignment store and eBay, is that when you walk into a consignment store there is a physical location -you meet people; there is overhead. If you, however, hire someone online to sell for you, and they ask for the product first well they could be scamming you and this is another level of protection.

I used a consignment person once; she asked me to send her pictures of my product...she didn't do that good of a job - at least she didn't do better then I could do so I ended up not using her again - but I am a little bit more savvy when it comes to online marketing (or marketing in general) then Joe Schmoe.

Re:Ok, so anyone who goes THROUGH an auctioneer to (5, Insightful)

ottffssent (18387) | about 9 years ago | (#13793672)

What's particularly irksome is that this represents triple-taxing of the transaction. eBay consignment shops need a POP because people are more comfortable with that, and shipping an unsold item to sell it and then ship it again is just too expensive. So the business is paying taxes in the state in which it is incorporated. And possibly in all states in which its shops operate (I'm not familiar with the tax situation there). And certainly the individuals who eventually receive the shops' profits are taxed on income. The double-taxation of corporate income is reasonable because the corporate tax rate is low and incorporation provides concrete advantages which it is reasonable to pay for. I really don't see how this third layer of taxation is anything but an attempt by the states to suck a little more money out of the population without providing anything in exchange.

Re:Ok, so anyone who goes THROUGH an auctioneer to (0)

Anonymous Coward | about 9 years ago | (#13793720)

I oppose this law on other grounds.

But I have to ask -- if the state is "not providing anything in exchange" for your tax money, why do you live there? Why not just move to Congo [] , large parts of which have no functioning government?

Re:Ok, so anyone who goes THROUGH an auctioneer to (1)

Hognoxious (631665) | about 9 years ago | (#13793894)

Some might say that's an improvement. After all, it's a former Belgian colony.

Re:Ok, so anyone who goes THROUGH an auctioneer to (0)

Anonymous Coward | about 9 years ago | (#13793760)

youre right except in the case of ebay live auctions

Re:Ok, so anyone who goes THROUGH an auctioneer to (0)

Anonymous Coward | about 9 years ago | (#13793798)

Nah, ebay isn't technically an auction either. An auctioneer take the item from you and gives you the money when it sells.
eBay is just a glorified classified site. They do not take the item for you.

It is your responsibility to negotiate payment and delivery of the goods.

If someone else is taking the item from you and negotiating the payment and delivery of goods on your behalf, that is someththing else entirely. Thats what they are trying to regulate. Perhaps requiring an auction licence doesn't make sense, but a licence to run a consignment business does make sense.

Re:Ok, so anyone who goes THROUGH an auctioneer to (1)

P3NIS_CLEAVER (860022) | about 9 years ago | (#13793859)

An auction is more than just a guy taking bids. If you look at Sothebys a considerable amount of time is spent making sure the article is genuine, promoting the auction and the items in their catalog. I am not sure how much of the certification goes into these areas though.

Re:Ok, so anyone who goes THROUGH an auctioneer to (1)

squiggleslash (241428) | about 9 years ago | (#13793892)

So does everyone who wants to hire an auctioneer now need a license to auction? How non-sensical is that?
Nope. Anyone can hire an auctioneer, but the auctioneer needs to be licensed. You don't need the license, the auctioneer does.

BTW your spelling of nonsensical is, well, nonsensical... still, I bet at least something here's misspelt, so don't take it personally.

This is, quite literally, a stab at taxing the internet
No, it's a stab at implementing regulation that already exists in the offline world to the online world. In meatspace, if you sell something yourself and accept the highest offer, that's fine and unregulated. If you set yourself up as someone who sells on behalf of others, you generally have to follow certain laws aimed at consumer protection, ensuring your competence and that people who hire you know that you're a competent auctioneer. The same rules apply, say, for driving. If you want to drive other people around, commercially, you generally need some form of taxi driver's license. And most of us actually find that a good thing, we know the unlicensed cabby is the one who's likely to rip us off.

It's not a simple "They're trying to tax the interweb" thing. Far from it. There are dumb aspects, like the fact the training, right now, applies to meatspace auctions and contains portions irrelevent to online auctions. But the principle isn't as stupid as the kneejerk reactions from many on Slashdot say.

Given ebay's efforts... (1, Interesting)

ElGuapoGolf (600734) | about 9 years ago | (#13793531)

Considering the number of people who have been ripped off via Ebay, and the fact that Ebay controls not just the marketplace, but the most popular method of payment (PayPal), and that if you get ripped off Ebay's of no help at all, this is not a bad idea at all. I'd love to see state license numbers when I buy from people.

Read the damn article (3, Informative)

mOoZik (698544) | about 9 years ago | (#13793643)

This only pertains to people who sell other people's goods online. The headline is misleading.

Oh shesh... (2, Insightful)

jamesgamble (917138) | about 9 years ago | (#13793533)

That is just ridiculous. They have no way of enforcing it and even if they did, EBay would probably challenge the states. An easy way to get by it though would be to list all auctions as "Buy it Now" with the option to bid. That way it's like a regular online store and auctioning laws do not apply.

Never hold up in court... (0, Redundant)

ClaudeVMS (637469) | about 9 years ago | (#13793568)

Ebay is the "auctioneer" not the person providing the item for auction. Doh!

Re:Never hold up in court... (1)

porcupine8 (816071) | about 9 years ago | (#13793726)

Actually, I think that eBay bills itself as a "venue" for holding an auction, not as the auctioneer.

But the thing is, I don't think the seller is really an auctioneer, either - this is auctioning without an auctioneer, that's part of the point of it. Although I think it's a great idea for consignment places to get bonded, etc, I'd rather just see people be smart enough to only sell through bonded sellers rather than it be legislated.

Interstate Commerce (4, Insightful)

MBCook (132727) | about 9 years ago | (#13793577)

Wouldn't this law be regulating interstate commerce and thus unconstitutional? The only way I could see this as valid would be if they required a license for one person from that state (ND, for example) to sell to another person in that state (intrastate commerce). I can't imagine that states can regulate international commerce either so that same person would be allowed to sell to Canada, etc al.

Either way, I see it as a stupid idea. This is two things: a blatant attempt at getting more revenue for the state (though licensing fees), and (pure guess here) an attempt by auctioneers (probably a union of some sort) to get more money because their trade is threatened (in some ways) by eBay.

Why eBay? Why not require it for garage sales? Why not go after silent auctions that all sorts of places run (like many school districts and churches to raise funds). Usually there is a little good a law might do, or you can at least see some good intent behind it. This would do anything but prevent everyone in ND from selling things on eBay.

If you want to protect people from fraud, go after the NDers that are actually perpetrating fraud on others through eBay. Come up with a way to become a "registered eBayer" in the state so people can guaranty that you can be held accountable if you rip people off (but make it voluntary, and free or nearly so ($5) with no classes our anything like that).

Re:Interstate Commerce (1)

cpt kangarooski (3773) | about 9 years ago | (#13793620)

Not all regulation of interstate commerce by states is unconstitutional, and enough intrastate commerce involves interstate commerce (e.g. by operating over interstate telecommunications systems, even if only within a state) that it's considered interstate commerce.

Re:Interstate Commerce (3, Interesting)

Pedrito (94783) | about 9 years ago | (#13793808)

Wouldn't this law be regulating interstate commerce and thus unconstitutional?

No, it's not regulating interstate commerce. The law is regulating in-state businesses. Keep in mind, this is for people who operate business selling OTHER PEOPLE'S things on consignment. This isn't for people operating a business selling stuff they've bought from wholesalers on e-bay or even individuals selling their stuff on e-bay.

In fact, it's not a particularly onerous thing to ask. Having recently had to get insured to operate my own business as a consultant (a requirement of the company I work for). Getting bonded and licensed isn't very costly. And in the end, the idea is to protect the consumer which isn't a bad thing.

Re:Interstate Commerce (1)

morgan_greywolf (835522) | about 9 years ago | (#13793820)

Actually, what they are requiring is that people who auction things on eBay by consignment get an auctioneers license. So the transaction is actually between the seller and the stand-in auctioneer, not between the seller and the buyer. Still, I don't see where consignment auctioneers should have to be licensed as auctioneers. Like or not, they are STILL not running the auction, eBay is.

This has been discussed before... (2)

H_Fisher (808597) | about 9 years ago | (#13793593)

See previous /. story from March [] .

Also note that this affects only people who are go-betweens for other customers, NOT your typical homemaker or hobbiest who just discovered that Aunt Ida's prized mathom is going for $5,000 online.

Re:This has been discussed before... (1)

zaren (204877) | about 9 years ago | (#13793707)

"Commissioner Kevin Cramer said he does not believe the law applies to people who sell their own goods over eBay, but it could cover those who sell property consigned by others for a fee."

In other words, he's not sure exactly what it covers, but he's backing it anyway.

only applies to businesses (1)

LOTHAR, of the Hill (14645) | about 9 years ago | (#13793595)

Note that the N.D. law only seems to apply to consignment businesses that are selling other people's property. It doesn't apply pople selling personal property or to businessed selling thier own merchandise. It also doesn't apply to people selling someone else's property, but I think there's a different law against that.

Read the fine print.... (0)

Anonymous Coward | about 9 years ago | (#13793625)

The point of the law is that it applies to places like Pawn Shops - not the Joe Schmo who sells Grandma's old trinkets or the like. Consignment is the factor at hand, and if there is no consignment according to this law, there need be no paperwork through the state.

It helps to read things and understand them before getting terribly upset over them.

Excellent (1)

roman_mir (125474) | about 9 years ago | (#13793637)

My new auction site will be based in Toronto.

Just Certify Instead (2, Insightful)

blueZhift (652272) | about 9 years ago | (#13793651)

This law seems reasonably well intentioned, but as with internet sales taxes it will be hard to enforce via state laws. And of course for sellers outside of the U.S., forget it. Wouldn't it be better for states to make this a voluntary certification rather than a law. Sellers that have gone through the certification process could use it as additional proof of trustworthiness and the state doesn't have to waste resources trying to enforce a law that may be inherently unenforceable for internet commerce.

Saves taxpayer money (1)

HDlife (714246) | about 9 years ago | (#13793843)

This actually saves government money by cutting down on fraud originating in their locality. It puts the burden on the consignor and his bonding agency to prove trustworthiness. That $5,000 bond will cover the petty rip-offs without involving the the cops. Bonding also puts up a barrier to keep out crooks and stolen-goods fences. I bet the auctioneer classes will pretty trivial and will teach sellers what kinds of activities are illegal.

My guess is that online courses and bonding would quickly be set up by eBay to help out.

I'm not a big government guy, but why should online hocks be exempt from the basic rules that all other resale business owners have to deal with?

Taxes and Licenses.... (1)

scorp1us (235526) | about 9 years ago | (#13793664)

Why pay taxes and licenses to generate revenue for the government to operate. Unless there is a fiscal crisis, there should be no new taxes or licenses levied on the people.

Governments are not corporations. They are not to thrive of the populace, they only exist to support the populace in whatever limited role the voters decide. I personally would not elect anyone who thinks the government should het "its fair share", or that a new popuilar practice is some untapped revenue stream.

Re:Taxes and Licenses.... (1)

meta-monkey (321000) | about 9 years ago | (#13793755)

It has nothing to do with revenue stream. It has everything to do with auction houses annoyed with small-timers butting in on their business through the interweb. Licenses are simply artificial barriers to entry erected by politicians at the behest of monied, established interests. Why do you think hairdressers have to get a $5,000 license to cut hair? It sure isn't to protect people from bad haircuts.

Re:Taxes and Licenses.... (1)

TheSync (5291) | about 9 years ago | (#13793880)

We call that Rent Seeking [] in the world of public choice economics.

I am proposing a license requirement... (1, Troll)

jferris (908786) | about 9 years ago | (#13793668)

...for users to RTFA before jumping to conclusions about government trying to control their daily lives on every other story.

Re:I am proposing a license requirement... (0)

Anonymous Coward | about 9 years ago | (#13793799)

Anytime a new regulation is imposed by force it is a bad thing. Government licenses are immoral and illegal restraints on human action. It is only a way for them to steal more money from an as-yet barely regulated sector of the economy.

It kills the pigs that they don't have a piece of the Internet pie.

But don't worry, Mr. Righteous, we'll all be Rightless before you know it, and you can be a happy guy, protected from all that dangerous freedom out there.

Re:I am proposing a license requirement... (1)

jferris (908786) | about 9 years ago | (#13793821)

Hold on a sec... Can you repeat that after I put my tinfoil beanie on?

Interstate Commerce... (1)

0WaitState (231806) | about 9 years ago | (#13793669)

This will probably get slapped down pretty quickly via the interstate commerce clause of the constitution. State regulations still might apply to people selling within the state, but somehow I don't think there's too many North Dakotans selling to other North Dakotans, as opposed to out of state. Large states (CA, NY, TX) simply won't be that stupid, at least, not if governors and state legislators want to be re-elected. Interstate Commerce Clause []

Re:Interstate Commerce... (0)

Anonymous Coward | about 9 years ago | (#13793751)

Like everyone else will point out to you.... This is regulating MIDDLEMEN who sell stuff FOR OTHERS on Ebay... or any other auction environment. If they live (or, presumably, to do this work) in North Dakota, they have to get that license to do that kind of business. It has NOTHING to do with making North Dakotans get licensed before they can sell their own stuff on Ebay.

Re:Interstate Commerce... (1)

whoever57 (658626) | about 9 years ago | (#13793941)

This will probably get slapped down pretty quickly via the interstate commerce clause of the constitution.
Frankly, since Wickard v. Filburn [] and Gonzales v. Raich [] , the Interstate Commerce clause can be interpreted to refer to just about any activity, making the Federal Government's powers effectively unlimited.

But of course (1)

jimmy_dean (463322) | about 9 years ago | (#13793701)

But of course they'd want to ruin a perfectly good thing with a new law...that's just like a politician. I mean if there's no cool new laws to write like this one, then a politician would be out of a job (or at least pretty bored).

Why don't they stay out of the American people's hair and take away a few laws. Seriously, America is becoming a fascist state. Freedom is something that is so hard to protect from politicians messing up.

Old news, but protection needed (1, Informative)

Anonymous Coward | about 9 years ago | (#13793704)

This is primarily a money grab. While additional protections from scams out there would be a good thing especially if a state law would help tip the balance on whether state or local law enforcement on the scamming end gets involved or not, the bad part of this is that it really is a money grab and power grab by the states and localities pushing for state involvement.

The couple hundred positive feedbacks with a three-nines or better positive to negative would be a good indicator of whether to trust a seller (or buyer) whether selling for himself or on consignment. All this will stop is the casual seller or buyer who either isn't tech savvy or won't sign up for ebay. As for protection against scams, paypal is a nightmare, even refusing to close their account unless you agree to their new terms first (even with no money in the account), and their attempts to get you to expire your credit card protections while waiting for their help is well-documented elsewhere.

What is really needed is federal protection against this auction license garbage, along with federal protection on selling/buying via ebay out of your home instead of at a commercial location, like the vast majority of ebay buyers/sellers do even though it is against local ordinances. Small businesses and casual sellers working their way up to small businesses need nurturing and help, not a raid by the local building department because UPS stops by 2 or 3 times a week and the local nosy neighbor with nothing better to do doesn't like it.

No, thanks (4, Insightful)

jdavidb (449077) | about 9 years ago | (#13793711)

If I want to hire someone to put my stuff up on ebay, I'll decide whether I want them to have a license or certification or not. Please don't try to represent me by deciding this on my behalf.

I don't understand the opposition to this (1)

BrianH (13460) | about 9 years ago | (#13793715)

If you are taking other peoples property and selling it at auction, you are acting as an auctioneer. That some states require autctioneers to be bonded is nothing new.

Around where I live, we have a number of large commercial businesses that sell stuff for you on EBay. You drop your items off with them, they sell it on EBay for you, and take a 20%-30% cut off the top. There's nothing wrong with requiring bonding for these kinds of businesses to prevent fraud (i.e. seller says item sold for $50 and keeps $10 to cover his 20% fee, when item actually sold for $70). Because this kind of business involves a trust relationship, bonding is called for.

Article 1, Section 8. Clause 3. (3, Insightful)

lobsterGun (415085) | about 9 years ago | (#13793738)

The Congress shall have Power To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;*

* Not valid in all areas. Some restrictions may apply. Consult an attorney before attempting trade within the several states. If redness or inflamation appear discontinue interstate trade immediatly and seek legal assitance.

The reason for this is simple..... (1)

8127972 (73495) | about 9 years ago | (#13793740)

.... Governments want to cash in the eBay craze so that they have another income stream.

Re:The reason for this is simple..... (1)

anotherone (132088) | about 9 years ago | (#13793938)

Of course! After all, government was originally created to tap into this newfangled "Domesticated Agriculture" income stream.

Something I'd like Congress to consider... (2, Interesting)

Alpha_Traveller (685367) | about 9 years ago | (#13793748)

I'd like Congress to consider using an actual advisory panel of random internet business owners (not those appointed by the executive branch) and let them advise congress on what kinds of laws would be reasonable and acceptable by the internet business public.

Taxing and Regulating EBay or other auction businesses like it is absolutely unacceptable, not just to the potential seller but for the entire business of auctioning.

You don't do it to live, in-person auctions, you don't do it online. It's just that simple. Get your taxes somewhere else, like oh the real businesses in your own damn states that you're giving tax breaks to. They don't need it and they don't deserve them. Don't make Auctioneers suffer for it.

Yeah, licensing of car dealers... (3, Insightful)

aquarian (134728) | about 9 years ago | (#13793766)

...has really killed off the sleazy car salesmen and predatory financing.

excuse me? (1)

ed.han (444783) | about 9 years ago | (#13793791)

this is a horrible idea! why does a sale b/n private individuals require licensing? this is the government attempting to get a piece of the action: nothing more, nothing less. licensing fees, required classes...WTF? if i own [property] and choose to sell it to [buyer], that's none of the government's business so long as no deception occurred.

it's a naked power grab, folks and represents an expansion of government power into citizens perfectly legal dealings. this should be rejected, and quickly, IMHO. doesn't ebay already have seller ratings and other protections?


That's it, I'm using fixed-pricing (2, Interesting)

davidwr (791652) | about 9 years ago | (#13793794)

Regulations like this are just begging to be routed around.

If my "buy it now" price is the same as my reserve, then it's not an auction and not subject to the law.

Consignment salesmen may find it easier to just tell their customers "Here are recent ebay prices on that item. Pick a price and I'll sell it on e-bay for that fixed price" than to mess with licenses etc.

Completely stupid idea (1)

ChrisGilliard (913445) | about 9 years ago | (#13793796)

I think this is one of the dumbest ideas I've ever heard. The whole point of Ebay is to make it simple for people to buy/sell online. By adding in government regulation that requires people to take an auction class, we're totally going against that. When I buy on eBay, I can look at other customer's comments about the seller and I can chose to shop with only power sellers if I want added security. It seems to me that Ebay has already solved this one and that a class on auctions is completely unnecessary. Sellers are not auctioneers, they are sellers. If you attend an auction in real life as a seller you don't need to take a class. Why should you have to if you're going online to participate in an auction?

Fencing Goods (1)

ebooher (187230) | about 9 years ago | (#13793810)

I don't believe anything of this sort is strictly a "tax" based decision. Especially with the low volume of money the state would be reaping from the decision. I mean, where I am there are a lot of the "I Sold on eBay" places. But not that many.

I think many are overlooking the less obvious here. Stolen goods. I know here, at least, an Auctioneer and a Pawn Shop are required to be bonded, not for tax purposes, but to know who they are. A "reputable" Pawn Shop must even make inquires and file reports with local Police Departments when they get certain types of merchandise.

This looks more like the state wanting to be able to watch the movement of goods than wanting to earn tax revenue from a couple of hundred "auctioneers." Especially if part of the law requires items with serial numbers to be ran through the Police to verify they have not been reported stolen before they can be sold.

The reasons for the law in the first place... (3, Insightful)

Vellmont (569020) | about 9 years ago | (#13793812)

Step back for just a minute and look at the reasons why it was decided long ago that you needs an auctioneer license. Obviously running an auction takes a bit of skill. Recognizing bid raises, knowing how much to raise the price, knowing how long to wait for the item to be sold, and the whole "talking fast" thing are special skills. The idea of regulating it is to protect the public from unskilled auctioneers who won't get a good price for an item.

Almost all of that crap is handled by Ebay itself. The person selling the item by proxy only has to set an initial price, describe the item, etc. These are all skills that don't normally require regulation in any other context. Why (other than trying to raise more tax revenue) should the states try to regulate trading assistance?

Welcome to the Brave New World! (1)

Ulrich Hobelmann (861309) | about 9 years ago | (#13793818)

Apparently it wasn't enough that Europe spawned several fascist states in the 20th century. The 21st belongs to the USA.

What's next? Requiring you to get an official license to help your neighbors? A license to cook your own food?

And talking about enforcement: they should really put wiretaps on every US household, intercept all traffic, and if anybody *gasp* sells anything on ebay without a license, shoot them. Optionally broadcast that on TV, so that everybody is warned.

Huh? (1)

Wyatt Earp (1029) | about 9 years ago | (#13793883)

Licensing sales is now fascism?

Thats either trolling or ignorance. This is what governmnets do, they tax people or make them get licences so the government can pay for things. Nothing about fascism, its all about revenue streams for the local and state governments.

We have small business licences, drivers licences, health inspection, car inspections, DEQ checks, mufflers, building inspections, licencing and bonding, it's all about exclusion to raise your fees and revenue streams for the government.

Not facsism.

Re:Welcome to the Brave New World! (0)

Anonymous Coward | about 9 years ago | (#13793900)

Hey, welcome to present-day America, the land of "Opportunity," where, if you can find a small way to stay ahead of your rising costs of living, we'll find a way to tax, license, or regulate you!

Points (0, Flamebait)

Tomchu (789799) | about 9 years ago | (#13793819)

Points for anyone who can somehow spin this story into an anti-Microsoft, pro-Linux frothing-at-the-mouth post. Twitter? Anyone?

totally gey (0)

Anonymous Coward | about 9 years ago | (#13793826)

I am not an "auctioneer", Ebay is!
Isn't that the whole point of selling on Ebay...? They provide the house, you provider the crap.
What's next, garage sales and lemonade stands?

Ebay is not an auction (1)

mattnuzum (839319) | about 9 years ago | (#13793850)

From a legal standpoint, E-bay is not an auction. In their FAQ they have a reply to the questions about why the closing time doesn't change to last-bid + 5 minutes or similar. Basically, if they did that they would be regulated like an auction which would add much complexity and legal red tape to their service.

That's a paraphrase. Their FAQ [] is so big that it's hard to find answers to specific questions.

How are you going to enforce... (1)

ZeroExistenZ (721849) | about 9 years ago | (#13793852)

...a local law on a service run globally?

blah blah blah, they dont give a shit... (1)

Jackie_Chan_Fan (730745) | about 9 years ago | (#13793857)

You can argue this to death about "interstate sales", "ebay is the auctioner not the seller" and it really doesnt matter. The government will do what it wants, when it wants because they are in power.

So be prepared to sign up for an ebay license test.

The worst thing to do is to sit here any say "ah this will never pass its stupid"

Have you taken a look at our government lately? :)

Apparently it wants more money to make up for our trillion dollar debt.

Heh. Completely idiotic. (1)

Zey (592528) | about 9 years ago | (#13793874)

Ebay is the auctioneer. The auctioneer's services happen to be automated. Maybe Ebay might need to pay its $35 license fee and pay a $5000 bond. Big deal.

The seller is just, well, the seller -- someone who has purchased the auctioneer's services in order to sell a good or service at the highest bid.

If the legislators and bureaucrats in some hicksville US State are so dense that they can't fathom the difference, hopefully your courts will have a little bit more nous.

slippery slope. (1)

CDPatten (907182) | about 9 years ago | (#13793882)

The auction technically takes place only where the servers are hosted. The only state that can require it is that state(s).

Anything else is a very slippery slope into an area that will start to hinder the freedom of the internet.

Re:slippery slope. (1)

Jackie_Chan_Fan (730745) | about 9 years ago | (#13793901)

Anything else is a very slippery slope into an area that will start to hinder the freedom of the internet.

And its not like the government would ever hinder freedom :)

Ebay and PayPal should be held accountable. (2, Insightful)

tabbser (560130) | about 9 years ago | (#13793917)

I've written many letters of complaint to various orgs (BBB, FTC, Local Police) etc about both Ebay and PayPal, especially PayPal.
Ebay and PayPal are rife with fraud and do nothing to protect their customers. These companies should be held responsible for the staggering amount of fraud their companies facilitate.

Write to your local congressman, the FTC and BBB and tell them that you think PayPal behaves like a bank and you believe it should be treated like a bank. Also let them know that Ebay is littered with fraud and does shockingly little to stop it, despite being in the best position to do so.

and another thing.... (2, Interesting)

CDPatten (907182) | about 9 years ago | (#13793926)

Ebay is technically the auctioneer, hosts the auction, etc. Shouldn't they be the only ones that need a license. If not a simple change in their user agreement would protect the "auctioneer's" from needing a license.

It's always amazing... (2, Funny)

Nom du Keyboard (633989) | about 9 years ago | (#13793928)

It's always amazing to me the rights states feel they have over the lives of their citizens. How long before you need a license to sneeze? After all, sneezing can spread disease if done wrong. I'd say about 4 weeks of classes should be sufficient to teach you how to do it properly. Of course, you pay for this.

regulation=bad (1)

Free_Trial_Thinking (818686) | about 9 years ago | (#13793934)

What need less regulation, not more!
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