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Big Box Blame Game

After crushing most independent, ‘main street’ stores, Wal-Mart and other big retail chains are turning their guns on smaller online competitors. They’re asking their allies in Congress for new laws designed to cripple competition from online entrepreneurs.

In the name of preventing “retail theft,” the Wal-Marts of the world are telling Congress that e-commerce is causing dishonest employees and suppliers to steal from their store shelves and loading docks. That’s like blaming the back seat of cars for causing teenage sex.

Even the lobbying arm of the big box retailers, the National Retail Federation, knows this is a bogus claim. Their own 2005 study showed that most retail theft comes from a store’s own employees. Nevertheless, retailing giants and their lobbyists want new laws to hold e-commerce responsible for their own unwillingness to screen employees and spend more on security.

· HR 6491, the Organized Retail Crime Act, would make it a crime if a marketplace doesn’t pull listings when a competing retailer claims they have evidence of theft. This is just asking for abuse:  A high-markup retailer can claim that a particular item just HAS to be stolen “because it’s selling for less than my cost!”, and marketplaces like eBay and Overstock would have to pull the listing.

  • HR 6713, the E-Fencing Enforcement Act would require marketplaces to conduct investigations if a retailer provides a police report–dated anytime in the last year— claiming theft of goods similar to an online listing. A big-box chain could file a police report for theft of baby formula, then use this report to force online marketplaces to investigate every listing of baby formula – even by mothers whose newborns just can’t stomach the formula samples they brought home from the hospital!

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. Amazingly, only Internet sites are targeted by these bills, while newspaper classifieds and other “off-line” flea markets are not even mentioned.

The proponents of these bills say they’re about loss prevention, but they’re really about competition prevention—preventing online marketplaces from competing with big retailers.

Steve DelBianco

Executive Director, NetChoice

UPDATE: Thank you for all the commenters below that were directed to this blog post by eBay’s Main Street grassroots campaign. We appreciate all your efforts to fight against federal legislation that would impose
extraordinary and discriminatory restrictions on Internet marketplaces.