The people behind this new legislation say it’s intended to curb the sale of stolen property. But its realpurpose is to restrain an efficient, high-tech competitor from “stealing” customers.
That legislation is a California bill that essentially requires eBay traders to be electronic versions of pawnbrokers. Should the bill pass, California eBay sellers would have to cough up an initial fee of $295 and pay an ongoing fee of $175 twice a year.
The money would fund a statewide database to report every transaction of used goods. California pawnbrokers have been reporting such sales for years by filing paperwork.
The primary supporters of the bill are — surprise, surprise! — pawnbrokers, who are feeling competitive pressures from eBay, which calls itself the World’s Online Marketplace.
This is the third time Luddites have tried to regulate eBay, which has become the epitome of a global free market.
In 2004, eBay members sold $34.2 billion in merchandise. Last year, than figure reached $44.3 billion. If eBay were a country, it would have the 79th largest economy in the world.
According to ACNielsen International Research done for eBay, roughly 724,000 Americans said that eBay is their primary or secondary source of income (and that’s just Americans!). Another 1.5 million generate extra cash by selling wares over the eBay system.
Then there are the brick-and-mortar stores — eBay calls them Trading Posts — where sellers drop off merchandise to be placed on the Web site. The existence of the bill has led one franchiser to stop opening drop-off stores in California. Each of those stores, the franchise co-founder told the San Francisco Chronicle, generates “$1 million a year for local residents” and provides jobs for six to eight people.
And it’s not just California’s problem. Once pawnbrokers in other states see California lawmakers protecting California pawnbrokers from competition, they’ll demand protection, as well.
If it’s a level playing field the pawnbrokers want, then lawmakers should eliminate the assessments on pawnshops.
But this is about stealing customers, not property. It’s about trying to choke a burgeoning tech-based business that is vastly outperforming an ossified industry that can’t, or won’t, change its business model.