Big Retailers Pushing Legislation To Harm Online Retailers

from the why-compete-when-you-can-legislate? dept

Why should you compete with new technological innovations when you can just get elected officials to pass laws that greatly limit what those innovations can do? That seems to be the position of the National Retail Federation, the trade group that represents a bunch of the big offline retailers. We wrote about their attempt to do this last year, where they went so far as to claim (and then stand behind) that eBay was driving people to shoplift. Supposedly, selling stuff on eBay was just so addictive that once people ran out of their own stuff to sell on eBay, they would all rush to the nearest big box store to shoplift. That, of course, is totally bogus and not at all backed up by the facts. But who needs facts when you have politicians willing to do your bidding? The NRF's statement was so hilarious, we can't resist republishing it:

"Thieves often tell the same disturbing story: they begin legitimately selling product on eBay and then become hooked by its addictive qualities, the anonymity it provides and the ease with which they gain exposure to millions of customers. When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online. The thefts then begin to spiral out of control and before they know it they quit their jobs, are recruiting accomplices and are crossing states lines to steal, all so they can support and perpetuate their online selling habit."

While the three laws proposed last year went nowhere, it didn't take long for all three to be introduced again. The intended purpose of these three laws is to force these online platforms to interrogate every seller over every product they put online for sale. It goes against everything that's the basis of section 230 rules for online platforms, in that it says "you're not the tool someone uses, now you're liable for everything that happens with the tool." This is not, at all, about stopping crazy eBay addicts from shoplifting from big box stores. This is about making it tougher for people to buy and sell stuff online so that more people are forced to trek out to their local offline retailer to buy stuff.

The amusing thing is that, last year, when these same bills were introduced, the retailers were asked why they couldn't just do a better job policing their stores for shoplifting -- and the retailers replied that their employees were there to sell stuff, not to be police officers. Yet, the very purpose of these laws is to make that impossible for online retail services. It forces them all to be police officers, or face tremendous liability. It's no secret that it's tough to compete with new online services, but that's no excuse for passing bogus laws to harm those online players.

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National Retailers Refuse To Apologize For Claiming eBay Leads To Crime

from the lies-are-more-fun-than-facts dept

Earlier this week, we noted that the National Retail Federation, a lobbying group made up of a bunch of large traditional retailers, had claimed to Congress that eBay drove people to shoplift by being so addictive that people couldn't help themselves. According to the NRF, otherwise innocent people, after running out of legitimate things to sell, turned to a life of crime to support that eBay selling high. The whole thing is so preposterous, that the group NetChoice called for an apology from the NRF. The NRF's response? It stands by its comments:

"The testimony we submitted reflected the sentiments of many retailers that we work with."

Now there's a neat little rhetorical trick there. When called on the fact that they were lying in claiming a rash of eBay-induced criminals, the response is to claim that the statements "reflected the sentiments" of the retailers. So, even though those sentiments are based on pure lies, it's okay, because the statement reflected those sentiments.

In the meantime, it appears that NRF supporters have decided to respond with personal attacks, such as that one, directed at my post. It's also got some neat rhetorical tricks, such as claiming that what the retailers really meant when they said (and I quote), "When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online" was organized crime. Yet, that's clearly not what the NRF statement was claiming. It was talking about individuals who were selling stuff legitimately, until they couldn't find anything else to sell and began a life of crime.

See? So now that they've narrowly defined the issue as "organized crime" (ignoring what the NRF actually said and brushing over the actual stats on shoplifting being on the decline), the NRF supporter claims that these new laws are just "reasonable duties" for online auction sites to combat that issue -- never once explaining why online auction sites need to step in and do the work that the retailers themselves are unwilling to do. The retailers themselves admitted that they don't want their employees to act as police officers -- but they apparently have no problem demanding that their online competitors act as their police officers.

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Retailers Blame eBay For Driving Good People To Shoplift

from the gotta-feed-the-habit dept

Wow. Earlier this year we wrote about a bill, basically pushed for by big offline retailers, that would regulate online retailers. The big retailers made some bogus claims about an online "crimewave" that necessitated such legislation. Since that first bill was introduced in the house two other related bills have also been introduced, one in the House and one in the Senate. Earlier this week, hearings were held on the three bills, and the big retailers made the astounding claim that online auction sites need to be regulated because their "addictive qualities" lure perfectly innocent people into becoming shoplifters to feed their habit of selling online:

"Thieves often tell the same disturbing story: they begin legitimately selling product on eBay and then become hooked by its addictive qualities, the anonymity it provides and the ease with which they gain exposure to millions of customers. When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online. The thefts then begin to spiral out of control and before they know it they quit their jobs, are recruiting accomplices and are crossing states lines to steal, all so they can support and perpetuate their online selling habit."

Nevermind that the actual stats show that retail theft has been on the decline, while the majority of retail theft is actually due to insiders. Yes, the problem isn't with online retailers magically luring perfectly innocent individuals into lives of crime, but the big retailers own employees swiping stuff. Yet, when stores were questioned why they don't do more to prevent in-store theft themselves, a representative from Safeway claimed: "our associates are there to sell groceries, not to be police officers." However, even though the problem is with their own employees, who they don't want to turn into police officers, the retailers are asking Congress to, instead, turn all online retailers into police officers for them.

The combination of bills under consideration would give offline retailers the power to demand that online retailers interrogate sellers to find out if the goods they're offering for sale were stolen. They would also include a DMCA-like notice and takedown provision, allowing retailers to force auctions offline with a single letter and little proof. Yet, the notice-and-takedown is even worse than the DMCA's already dreadful system in that there's no provision to deal with any abuse -- meaning retailers could abuse the system sending false takedown notices and burdening online retailers over and over again, and there would be no punishment. On top of that, the bills would put liability on the retailers, directly contradicting the very point of section 230 of the CDA, which was designed to make sure liability went to the actually guilty party.

Basically, these three bills in combination are nothing more than a bogus effort by big traditional retailers to put a ridiculous liability and burden on online retailers to fix a problem that isn't as big as they make it out to be, and which they, themselves, have the most control over -- though they purposely choose not to do much to exercise that control. And, finally, these big retailers make up a totally bogus and unsubstantiated claim that online selling "addiction" is drawing a large group of folks into an unanticipated life of crime. Hopefully Congress sees through this blatant attempt by big traditional retailers to put a bunch of hurdles in front of online sellers.

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Retail Chains May Get Congress To Regulate Auction Sites Using Bogus Claims

from the amazing dept

Back in June, we noted that the Retail Industry Leaders Association, a lobbying group representing big store retailers was pushing Congress to start regulating online auction sites, claiming that they were experiencing a huge crimewave from thieves who would resell the goods on sites like eBay. Reader crystalattice points out that some Congressional Reps have put forth just such a piece of legislation, and now the press is parroting the claims that this huge crimewave exists, when the evidence suggests exactly the opposite. Shoplifting is actually decreasing, while insiders (employees) stealing goods is on the rise. The problem is often that stores simply don't police themselves well.

So, this isn't at all about stopping this supposed crimewave. It's a way for offline retailers to try to hurt the competition by adding some ridiculous liability to them -- somehow making them liable for the actions of users selling "stolen" goods on their sites. This is a blatant anti-competitive move that is using dubious claims to support the case. Hopefully the press and other politicians won't fall for it.

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Retail Chains Ask Congress To Regulate Online Auction Sites

from the competition-is-evil dept

We've seen so many industries freak out as the market changed around them thanks to the internet, that it really shouldn't be surprising when those "old school" players pull out the bag of sneaky tricks. However, in the case of retail stores, the tricks seem especially bad. Specifically, the Retail Industry Leaders Association, a lobbying group that represent the biggest retail chains in the US is asking Congress to start regulating what can be sold on online auction sites. The sneaky part is in how this is positioned. Since just complaining about the competition isn't likely to win over many politicians, these retail stores are claiming that online auction sites are creating a huge crime wave, as organized groups of individuals rob stores and sell off the results online. Of course, if that were the case, rather than blaming the internet, why not focus on better theft prevention techniques?

However, the really sneaky part of this push to get Congress involved is that the reasoning isn't even accurate. I'm sure there may be some groups of shoplifters out there who have been going around stealing goods out of stores and reselling them on eBay, but the details suggest it's barely a blip on the radar. A study by the National Retail Federation (who also represents large retailers) found that most store theft comes from employees or vendors. Only 1/3 comes from shoplifting. Stores themselves are partly to blame, as they've cut back on prosecuting shoplifters. And, most importantly, retail theft appears to be dropping rather consistently over the past few years.

So, basically, retailers get to push for the idea that they need to ban online auctions from selling certain products -- when it turns out what they really want is to get rid of the competition. There's no real evidence of an epidemic of thefts due to online auctions, and even if there were, the problem should be dealt with via the retailers' own loss management efforts.

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