USA: Claim legislation would provide High Street firms with unfair trading advantage

Etailers claim foul play over new chain-backed laws

Etailers in the US are up in arms over three laws bricks-and-mortar retailers are trying to force through Congress, claiming that they are aimed solely at crippling competition from the internet.

If passed, the laws would allow big box retailers including Wal-Mart, Target and Best Buy to issue take down notices to online retailers if they believe they is selling what are referred to as ‘fenced’ goods.

‘Fenced’ goods in the US are stolen products being sold through legitimate channels. Big box retailers claim websites like eBay, Amazon and Overstock have become a breeding ground for the selling on of ‘fenced’ goods.

The online retailers vigorously claim they do not knowingly allow ‘fenced’ goods to be sold through their goods, and claim that if the bricks and mortar merchants were granted these laws, they would be wide open for abuse – giving their High Street rivals an unfair advantage by providing a way to knock out unmatchable offers.

Currently, any retailers who suspect stolen goods are being sold through online marketplaces must make a complaint to local law enforcement, but the big chains claim that this takes too long, and want the powers to by pass police and courts.

The key is that the legislation would make it a crime not to pull any transaction after a take down order, making proving that the product ‘fenced’ a retrospective action – essentially breaking the "innocent till proven guilty" covenant of Western justice systems.

One element of the plan would be that anyone making more than $12,000 from online transactions must keep a record of all transactions.

Granted, most sellers utilising 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," the Coalition Against Organised Retail Crime told eWeek.

"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."

This has riled online retailers and other interested parties. Executive director of NetChoice Steve Del Bianco, a coalition of consumers, etailers and trade associations said blaming the likes of eBay, Amazon and Overstock for bricks and mortar chains not being able to minimise shrinkage was tantamount to "blaming the back seat of cars for causing teenage sex."

"All this blame-shifting has only one objective: taking law enforcement out of the loop," added Del Bianco. "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."

eBay was particularly angry about the plans. "These bills are blatantly discriminatory against online business models," eBay spokesperson, Catherine England said.

Part of what has particularly riled eBay is that this new legislation will not apply to flea markets, classified advertising or pawnshops – other channels with a reputation for ‘fenced’ goods. "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," added England.

"Small, independent sellers do compete with large retailers and they do put pricing pressure on them. They should be subject to harassment for doing that. In our view, organised retail crime can only thrive only to the extent they’re allowed to walk out the front door," she added.

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