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Florida weighs how to regulate eBay businesses

Add Florida to the growing list of states deciding how to deal with eBay and some of its top agents -- the businesses that sell stuff for other people.

Are they auctioneers? Pawnbrokers? Secondhand shops? Or something else?

There is no shortage of opinions on the matter. And certainly no agreement.

The issue took an odd turn recently when the quarterly newsletter of an obscure state board said the businesses -- operating under names such as QuikDrop, Snappy Auctions and Webay -- must be treated as auctioneers, requiring their owners to be licensed.

"It's just common sense," said Fred Dietrich III, chairman of the five-member Board of Auctioneers. "If you are going to hire someone to sell your merchandise, you need someone that is reputable and licensed."

But that came as a surprise both to the state's Department of Business and Professional Regulation and eBay, a company known for aggressively defending its interests and keeping close tabs on state happenings.

"That interpretation is different from our understanding," said Catherine England, an eBay spokeswoman.

It's also different from the state's official position.

Kristen Ploska, a spokeswoman for the Department of Business and Professional Regulation, said the stores are not breaking any laws.

"The department does not feel these types of entities require an auctioneer's license, however, we examine each situation on a case by case basis," Ploska wrote in an e-mail.

She also said that the department's interpretation of state law has since been explained to the auction board's chairman.

Dietrich's response: "I don't really follow the thinking here. But that's not my call."

Regulation worries some

Debates such as this one are taken seriously by the auction giant, which has worked aggressively to turn back similar efforts in states such as Louisiana, Tennessee and Maine.

Often referred to as drop-off stores -- as in, you drop off an item and they sell it for you -- these businesses are increasingly important for eBay and the 100 million-plus listings found there at any given time.

Scattered throughout the nation are thousands of sellers such as John Borger, a former chef making a living on eBay. The 10-year veteran owns two QuikDrop franchises in Orlando and plans to add two more.

Like other storefront sellers and so-called trading assistants, he worries that excessive regulation could shutter some high-volume operations -- something that would cut into eBay's sales.

"Do you know how much they would lose? Oh, my God," Borger said.

And the idea of having to get a license -- which requires 80 hours of classroom work and a yearlong apprenticeship -- is not appealing.

"I might have to move to another state," Borger said. "I could take my franchise to Georgia."

Although there doesn't appear to be any reason for Borger to look for a new home, businesses such as his remain a sore point for pawnbrokers and auctioneers.

The latter argue that consumers put themselves at risk when dealing with unlicensed auctioneers. In Florida, for example, there is a recovery fund available for consumers who are the victims of a negligent auctioneer.

"If we were to cheat you out of your money, you could go to the state and get your money back," Cliff Shuler, a veteran auctioneer in Titusville, said.

Competitive advantage?

Pawnbrokers wonder why eBay stores don't face a level of scrutiny similar to their own. Pawnshops in Florida, for example, must report to police a description of every item they take in for sale.

They argue that criminals can easily use eBay shops to rid themselves of stolen property. And that a lack of regulation makes life easier on storeowners.

"I think that's a competitive advantage for eBay," said Jerry Whitehead, a pawn-brokerage consultant in Tamarac and a member of the board of the National Pawnbrokers Association. "We think it's an issue that definitely needs to be addressed."

To some degree, it has -- though many eBay store owners may not know it.

On Oct. 1, a new Florida law took effect dealing with consignment stores using the Internet. The law was designed, in part, to deal with the eBay stores, said Hillsborough County sheriff's Detective Bill Streator, who helped write the measure, which had eBay's support.

"We're just keeping up with the changing times," Streator said.

Among other things, the law mandates how eBay stores deal with property. For example, any item with a serial number must be checked against the Florida Department of Law Enforcement's stolen-property database.

Mark Dickey, president of the Florida Pawnbrokers Association, said the change will be good for the public, without creating too many hassles for eBay stores.

"I don't think it creates an undue burden on anyone," said Dickey, who owns a pawnshop in Brandon. "We live under more stringent rules than those every day."

Laws a hard sell

Such laws -- when they require only minor red tape -- are of little concern to eBay. Instead, the company focuses its considerable power against more stringent laws, such as those requiring its trading partners to be licensed auctioneers.

The company says such restrictions could hurt more than 430,000 people in the U.S. who earn part, or all, of their income through eBay.

"There are actually people making a living selling goods and products on our site," said England, the eBay spokeswoman. "It could be detrimental to our marketplace and also their livelihood."

The company argues that its sellers are not conducting auctions in the traditional sense -- and that antiquated laws in many states simply do not take the Internet into account.

Consider the case of Tennessee, where eBay store owners were initially required to have an auctioneer license.

Debbie Gordon, president of Snappy Auctions, spent five days in auction school to stay legal. There she learned a range of skills, including how to sell farmland, cattle and firearms.

The following year, the state changed its mind and removed the requirement.

So how much of that auctioneer training is Gordon still using today? None of it.

"Those were five days I'll never get back," Gordon said.

 

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