IP Democracy: eBay's Grassroots Machine Fights 19th Century Rules

The New York Times’ Katie Hafner has this piece today about eBay’s efforts to fight state and local regulations that affect its online trading business. The article uses as its centerpiece successful efforts by the Internet giant to exempt eBay traders from auction licensing requirements in Louisiana, but expands beyond that to explain how eBay has forces on the ground in many states to battle laws, mostly auction license requirements.

EBay’s lobbying activities are not confined to Louisiana. As the company has spread its innovative and influential wings across the Internet, it has also woven together a muscular and wily lobbying apparatus that spans 25 states. “It is a fast-moving train, and if you get in front of it you’ll get flattened,” said Sherrie Wilks, an official with Louisiana’s licensing agency, who is concerned that eBay flouts regulatory oversight by persuading state legislators to take the company’s side.

Although the piece attempts to paint eBay as a potent political powerhouse trying to evade consumer-friendly laws, in truth eBay has little to do with the livestock and farmland auctions around which these laws were originally erected. eBay has also fought off its inclusion in laws originally designed for pawnbrokers, such as one in California that would have regulated eBay drop-off stores.

Most of these laws force eBay sellers to pay a $300 fee for a license, and the article documents one Tennessee owner of a chain of eBay drop-off stores having to shell out $700 for a license and attend a five-day course on auctioneering that dealt mostly with cattle and land and firearms. While it seems that eBay does use its financial might and vast network of sellers to rouse grassroots opposition to encroaching regulation, that’s a good thing.

Trying to extend laws that apply to pig sellers and pawnbrokers to eBay or any other Internet innovator is probably not a good idea. That’s not to say that some new kinds of regulations and laws might not be needed — but let’s not throw so-far-unclassifiable Internet activities into 19th century regulatory classifications.

Posted by Cynthia Brumfield on June 4, 2006 9:35 AM to IP Democracy