Internet auction law

With the increasing popularity of the Internet and the World Wide Web in particular, the online auctions became a matter of common practice, their escalating attractiveness just inviting more Internet traffic their way. Online auction sites, like the eBay, expand daily and many businesses, besides having a store or other presence on the Web, create an eBay store as well. Other Internet portals, like Amazon.com, started with their own Internet auction sites, whereby eBay remains the biggest and the most well known outlet of such online activity.

When the whole Internet craze started and many auction sites begun to appear, the stories of fraudulent sellers increased as well and people started to ask for legislative protection when buying online. Several such solutions, besides the law makers’ inability to harness the beast in time, were presented by the sites themselves.

The already mentioned eBay introduced seller ratings, comments regarding the seller, both posted by the buyer, as well as a secure payment method per PayPal, which belongs to the same company, eBay, Inc. StubHub and Skype are additional businesses owned by this Internet behemoth.

In 2004, the Federal Trade Commission released a guide with the name “Internet Auctions, A Guide for Buyers and Sellers”, with extensive and accurate information and guidelines for auction enthusiasts and professional auctioneers. The instructions outline how to pay online, what to watch for, which fraudulent actions are known and being perpetrated, how to avoid such, where to go and who to contact in case of fraud and other very helpful data.

National Consumers League operates a so called Internet Fraud Watch, which covers current issues regarding Internet fraud and online auctions in particular.

A separate Internet auction law is not available. eBay is practicing business in several countries throughout the world, every single one has laws and bylaws covering and regulating them. For America, the responsible party is the Federal Trade Commission. In Germany the case “ROLEX” created a big impact when it was ruled that the law regarding auctions is not applicable on the online counterpart and that common trade, crime and fraud laws are to be applied.

The European Union has no regulations regarding the auctions per se, more or less every member state is left to regulate the matter on its own, thereby subjecting the law to general regulations and suggestions.

It is not to be expected that a separate Internet law for online auctions is going to be proposed, not unless a general understanding has been reached to regulate the whole Internet as such. Until such an agreement has been reached, the matter will stay as it is.