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kidscomputerWhile live auctions have been around since 500 B.C., I believe it’s fair to say that eBay originated the online auction concept.

AuctionWeb (soon after to be www.eBay.com) was opened for business September 5, 1995 and the first item sold via an online auction was a broken laser pointer for $14.83.

Ever since eBay.com (and even before I suppose) states in the United States have been looking at the need to license those selling items in an online auction.

This need would seemingly stem from two basic premises:

    • Consumer protection
    • Revenue

Nine notable efforts to-date to license or otherwise regulate online auctions are listed here:

    1. Since 1991, Georgia — per their Attorney General citing O.C.G.A. §43-6-9(c); 91 Op. Att’y Gen. 15 (1991) — has concluded that online auctions need to be licensed with the Georgia Auctioneers Commission.
    2. On August 12, 1999, the New Hampshire Board of Auctioneers posted a notice in the Manchester Union Leader concerning folks selling items for “others” at online auctions and via catalog, basically saying it was illegal unless these folks were licensed auctioneers in New Hampshire. (See #7)
    3. In 2004 the Tennessee Auctioneers Commission determined that persons and/or companies that were selling on electronic auctions for someone else did fall under the Tennessee Code Annotated for a “Gallery License” designation.
    4. On September 16, 2004, Illinois enacted a law requiring Internet Auction Listing Services to register with the state.
    5. On May 2, 2005, Ohio passed a law requiring a license for anyone conducting an online auction (SB 209) — until it was repealed 4 days later (May 6 by SB 99.)
    6. On October 8 2008, Pennsylvania amended the Auctioneer and Auction Licensing Act to include the Trading Assistant Registration Act — those who for a fee or commission accept personal property to sell on behalf of another through an online Internet bidding platform.
    7. In 2009, Kentucky rewrote their auction licensing laws to not exclude online auctions from their auction licensing requirements, thus including online (or any other event termed “an auction”) More information on Kentucky’s laws is available on their website.
    8. On January 1, 2011, law in New Hampshire began to require most online auction (providers) to be licensed as auctioneers.
    9. On May 26, 2013, the Texas Senate passed HB3038 requiring all types of auctions (online, silent, live, etc.) to be conducted by a licensed auctioneer — signed by the Governor July 14 and expected to be in effect by September 1, 2013.

And, there will be more …

Other efforts have died in state legislatures, in committee, and/or did not receive a governor’s signature. Lastly, a few efforts began, but were abandoned.

Nevertheless, with the increasing strain on state budgets, and the increased use of online auctions, it’s fair to say that online auction licensing is here.

Is this online auction licensing good or bad? Probably. We explored this same subject regarding live auctioneer licensing here:

If a state licenses live auctions, it appears that online auction licensing is largely the same in most regards …

The typical online auctioneer:

    1. Advertises the property (as does the live auctioneer)
    2. Accepts or coordinates the acceptance of bids (as does the live auctioneer)
    3. Collects payments from the buyers (as does the live auctioneer)
    4. Provides a net settlement to the seller (as does the live auctioneer)

So why license one and not the other? This same question is likely being discussed in virtually every state legislature which has enacted auctioneer licensing.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.