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Online Sellers Shouldn't Be Liable for the Stolen Goods Sold on Their Sites

Today the Politico ran an article on online retail theft, an issue that NetChoice has been working on for a while now. In the article Retail Merchants want Feds to Crack Down Online, writer Lisa Lerer does a good job of laying out the position of traditional retailers:

The stores blame online auction sites — particularly those that allow sellers to offer items anonymously — for boosting the crimes from a few stolen razor blades to enough theft to supply a burgeoning industry. They want Congress to limit the types of items that can be sold online and to require the sites to investigate their sellers.

Retailers are also going to the states. There were bills in Maryland and Colorado, among others, that would prohibit a state’s residents and businesses from selling common consumer items such as cosmetics, non-prescription drugs, food products, and baby formula on any internet auction.

Here’s the reality:  when retailers blame online marketplaces for organized retail crime, they don’t want you to know about the root causes of their theft problems. The National Retail Federation conducted its own study of the problem in 2005, and found that:

  • Most retail theft occurs from a store’s own employees and retail vendors. Shoplifting accounted for less than one-third of all theft.
  • Retailers have pursued fewer prosecutions, arrests, and invoked civil recovery laws less frequently in 2005 compared to previous years.
  • Retail theft is not increasing. The rate has generally declined over the years, and is 12% lower than it was just 4 years earlier.

The article quotes NetChoice Executive Director Steve DelBianco:

“This is not about consumer protection; it’s about competition,” said Steve DelBianco, executive director of the NetChoice coalition of e-commerce businesses. “Retailers want to prevent competition from online sellers of new and used goods.

Indeed. The kinds of laws that retailers want to see would impose extraordinary and discriminatory restrictions on Internet auctions and invade the privacy of thousands of consumers that use them every day.

-Braden Cox