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If you’re going to act like an auctioneer or pawnbroker, then you should be regulated like one. That’s the message that several states are sending out to eBay sellers who peddle other people’s merchandise on the Internet auction site. In a development that has attorneys and state regulators grappling over how to regulate another burgeoning segment of Internet commerce, more than a dozen states have considered passing new laws — or amending old ones — that would require eBay sellers to get an auctioneer’s license. Also, the new statutes would require eBay sellers to attend auctioneering school and obtain bonds, some as high as $50,000. Attorneys for eBay Inc. say that in the last year, they have been in ongoing discussions with between 15 and 20 states that are seeking to impose regulations. The states include: California, Michigan, North Carolina, Ohio, Texas, Louisiana and Tennessee, which already has some eBay regulations in effect. North Dakota regulators recently asked the state attorney general’s office for a legal opinion on whether consignment-store owners need licenses to sell on eBay. North Dakota Public Service Commissioner Kevin Cramer said regulators in his state are not aiming to crack down on eBay sellers, but are simply trying to clear up some confusion as to whether current auctioneer laws apply to online sellers. “Our definition of auctioneer is very broad. It’s so broad that one could easily interpret that it includes people who take compensation for consigning things on the Internet in an Internet auction,” Cramer said. EBAY OPPOSES REGULATIONS Attorneys for eBay are strongly opposed to any such regulations, arguing that eBay sellers don’t act like live auctioneers or pawnbrokers, so they shouldn’t be treated like them. “Our main concern is that states are trying to regulate eBay sellers with outdated statutes that have no relevance to the types of business run on eBay or on the Internet,” said eBay attorney Tod Cohen, deputy general counsel and vice president for government relations for eBay. “In the live auction setting, your job as an auctioneer is to make sure that you don’t close it off until every live bid is received,” Cohen said. “It’s to get the highest possible price. You can’t do that on eBay.” Cohen sees regulatory efforts as a byproduct of what he believes are unfounded fears by local auctioneers who feel that eBay “is a threat to their business.” And Cohen disputed claims that regulation is needed to curb potential abuse. “This is not a question of needing additional laws to protect against fraud, but the requirement of bureaucracies to perpetuate themselves. Regulators need to regulate,” he said, adding, “It’s already illegal anywhere in this country to engage in fraud, on or off the Internet.” But eBay sellers should not be immune from some type of regulation, argued attorney Daniel Venglarik, an electronic commerce law specialist and shareholder at Dallas’ Davis Munck. Venglarik said that without some regulation of eBay sellers, the potential for abuse is greater. “Everybody wants to protect our consumers from fraudulent sellers, regardless of whether it’s live or on the Internet. And the fact that it’s on the Internet and there’s anonymity associated with it, it just makes it easier for the fraudsters,” Venglarik said. Venglarik also doesn’t buy into the argument that just because eBay sellers don’t act exactly like live auctioneers, they shouldn’t be treated the same. “If we don’t let them do it in person, why should we let them do it on the Internet? They couldn’t set up an auction house here in town. What makes it unique that they’re doing it over the Internet?” Venglarik said. Under Texas law, according to Venglarik, those who only intermittently sell items on eBay don’t need a license. “But those who have eBay ‘stores’ almost certainly do if they are operating out of Texas,” he said. But some argue that regulators should leave eBay sellers alone. “States can’t effectively regulate eBay sellers — and they shouldn’t,” argued attorney Jim Harper, electronic commerce specialist and director of Information Policy Studies at the Cato Institute. Harper views states’ attempts to regulate eBay sellers as “fairly transparent attempts to protect locals from competition rather than provide residents any meaningful protection.”

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