Many businesses have jumped online, selling their products through such venues as eBay or Amazon.com.  Sellers revel in the sites’ freedom, flexibility, and general lack of hassles.  However, criminals around the world, both petty and organized, are increasingly turning to these online venues as a means to sell stolen goods.

Congress, ostensibly seeking to solve this problem, has reintroduced a set of bills which would place new restrictions on online sales.  In 2008, the legislation was first proposed, but quickly dismissed as a laughable attack by brick-and-mortar retailers on their online adversaries.

Proponents insist this is not the case and that the laws are merely helping fight crime.  Under the new laws, retailers could order takedowns of goods on eBay or Amazon.com if they think that they might be stolen, without the need for proof.  Some retailers, such as Louis Vuitton have already tried to do this.

Furthermore, the new legislation would require sellers of certain goods to keep logs of their sales for up to three years and be subject to increased scrutiny.  All three bills were introduced February 25.  They are the Combating Organized Retail Crime Act of 2009, sponsored by Sen. Dick Durbin (D) of Illinois, the Organized Retail Crime Act of 2009, sponsored by Rep. Brad Ellsworth (D) of Indiana, and the E-fencing Enforcement Act of 2009, sponsored by Rep. Robert Scott (D) of Virginia.

The bills would force increased investigations by both online and offline marketplaces of elicit sales.  They would also require online retailers to place new disclosures on their online marketplaces.  And more importantly, they would require online sellers to record more information, purportedly to fight the fencing of stolen goods online.

Sen. Durbin states, "In the midst of the deepening economic crisis, organized retail crime seems to be flourishing.  Organized theft affects struggling retailers' bottom lines at a time when they can afford it least and the resale of these stolen goods puts consumers at tremendous risk of buying tainted or outdated products. Our bill takes immediate steps to combat these crimes by making it easier to identify and prosecute offenders and strengthening the penalties for those engaging in such crimes."

The NRF (National Retail Federation), an organization that represents the interests of brick and mortar retailers, supported the legislation.  NRF Vice President for Loss Prevention Joseph LaRocca states, "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."

Under the new legislation, the brick and mortar retailers would score a major coup in that they could order eBay.com, Overstock.com, and Amazon.com to remove numerous goods without any proof.  Under the proposed laws, failure by the online retailers to "expeditiously investigate" and remove the items would result in criminal penalties.

The CCIA (Computer & Communications Industry Association) is among those blasting the legislation.  Its President and CEO Ed Black writes, "We are very concerned that these bills separate out e-commerce and online marketplaces for discriminatory treatment.  The bills undermine user privacy, and threaten to erode crucial ISP immunities that are critical to innovation and growth on the Internet. At a time of financial duress and economic contraction, the last thing we should be doing is attacking innovative e-commerce services that contribute to economic growth."

Edward Torpoco, eBay's senior regulatory counsel also spit fire about the new law.  He adds, "Big retailers like the Internet, but they don't like Internet-based competition from small sellers who drive down prices and give consumers more choices. One way to attack pesky secondary market competitors is to suggest that there is something shady about them."

Adds another eBay spokesperson continues, "These bills are blatantly discriminatory against online business models. Selling stolen goods anywhere, online or on the street corner, is already illegal, so the point of the proposed legislation is more about limiting competition."

Steve DelBianco, executive director of NetChoice had more colorful commentary, likening retailers' attempts to blame online auction sites for illegal sales to "blaming the back seat of cars for causing teenage sex."