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By | OUT-LAW.COM 5th December 2007 15:49

Auction watchdog says eBay is illegal in France

Broker? Auctioneer! What's the difference ...

A French Government watchdog is trying to shut down eBay in France. The Council of Sales regulates auction houses and has said that the site should be bound by strict French auction rules.

The French eBay site does not have one of the Council's permits to operate as an auctions service and so does not have to abide by regulations which were made law in 2000. This, said the Council, gives it an unfair advantage and should change.

“This is unfair competition, because other auctioneers have to make sure they are transparent and that they provide guarantees,” Council chairman Christian Giacomotto told The Times. "Our ambition is not to regulate the world, but we want groups such as eBay to accept their responsibility.”

The Council has filed a lawsuit against eBay in France and hopes that a court will rule that eBay is an auction house and must abide by French rules.

The company said that the regulations should not apply because it is not an auction house, just a facilitator. "EBay has invented a new way of buying and selling, which has been adopted by 10 million French people, and which is not at all the same as that of auction houses," said a company statement. It called the action "totally unjust".

The Council said that eBay's failure to abide by the rules governing auction houses leaves consumers open to exploitation by unscrupulous eBay users, and could make it easier for users to sell fakes or to evade tax.

It is not the first time that the Council has taken such action. Earlier this year it began similar proceedings against a car auction site.

The Council said that it had studied eBay for three years and had put together a list of complaints against the site, including cases of goods not being sent and fake art being sold to consumers.

The Council said that it did not accept eBay's assertion that it was simply a broker and not an actual auctioneer. "What is the difference?" Giacomotto said to The Times. "They charge a commission to the seller and a commission to the buyer. These people cannot say they are responsible for nothing at all. If you rent your house to someone who sets up an illegal casino in it, then you share part of the responsibility."

French regulation of internet businesses recently failed when the Government lost a case in which it tried to prevent an online gambling company from operating. A Maltese horserace betting site, Zeturf, had a ruling banning it from operating overturned in July by France's highest court, the Cour de Cassation.

That court said that France's state monopoly on gambling broke EU competition rules.

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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