EBay pledges to work with police, opposes e-fencing bills

Bills unfairly target online marketplaces, officials say

Officials with eBay encouraged police, prosecutors and U.S. enforcement agencies to contact them for help on investigations, saying that working with law enforcement is a top priority for the huge retail and auction site.

But eBay officials also said Monday they oppose three bills in the U.S. Congress that attempt to crack down on the online sale of stolen goods.

The three bills, introduced in February, would either force "online marketplaces" such as eBay to give up private information about their sellers to retailers alleging the sale of stolen goods or allow retailers to sue online marketplaces for failing to adequately investigate stolen goods complaints.

EBay would support legislation that increases criminal penalties for selling stolen goods, but the three bills target the wrong people, said Edward Torpoco, senior litigation and regulatory counsel at eBay.

The bills "try to address retail theft by trying to impose additional obligations, additional liabilities on the marketplace," Torpoco said during a briefing with reporters. "We feel very strongly that any common-sense approach to combat retail theft needs to recognize first and foremost that the primary responsibility for preventing theft actually resides with the retailers, given that employee theft is the single leading cause of theft."

EBay works with 47 major retailers in its Proact program to combat the sale of stolen times on its site, eBay officials said. But they also encouraged retailers supporting the three bills to focus more on the "front end" of the problem, the point of theft. It's unfair to "focus the legislative regime completely purely on the back end," Torpoco said.

The National Retail Federation (NRF), a trade group, has supported the three bills, called the Combating Organized Retail Crime Act, the Organized Retail Crime Act, and the E-Fencing Enforcement Act. Shoplifting related to organized crime costs retailers US$30 billion a year, the group said.

"Organized retail crime is a rapidly growing problem, especially as challenging economic times increase the market for stolen merchandise," NRF Vice President for Loss Prevention Joseph LaRocca said in a statement.

"Retailers already struggling to survive are seeing their inventory disappear in increasing amounts, and the goods end up at flea markets or on the Internet at prices that put temptation into the path of cash-strapped consumers trying to stretch every dollar.

Losses from these crimes ultimately drive up the price of legitimate merchandise at a time when consumers can least afford it, and do serious damage to our nation's already weakened economy."

Earlier, Torpoco and other eBay officials encouraged law enforcement officials to report suspected criminal activity to them.

EBay's policies allow it to release contact information about suspected sellers to law enforcement officials without court-ordered subpoenas, eBay officials said. EBay officials spoke to more than 100 law enforcement officials during a training session in Washington, D.C., the first time eBay has conducted law enforcement training on the U.S. East Coast.

In addition to reports from law enforcement officials, eBay relies on its users and an automated keyword filter to keep illegal products off the site, officials said. Besides stolen items, eBay prohibits sales of items such as guns, prescription drugs and police uniforms.

EBay investigators passed out their contact information to the law enforcement officials in the audience.

EBay doesn't work unless buyers trust that the products they purchase are legitimate and authentic, said Tod Cohen, vice president and deputy general counsel for eBay government relations.

"We need your agencies to bring the [criminal] cases, and we stand ready to help you in any way necessary," Cohen said. "The only way services work is if our customers trust the payment will go through and the item will arrive on their doorsteps."

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