The FTC Office of Policy Planning, Bureau of Competition, Bureau of Consumer Protection and Bureau of Economics testified in Louisiana that eBay Trading Assistants (TAs), who sell items on eBay on a consignment basis, should not be required to licensed by the Louisiana Auctioneer's Licensing Board (LALB). Louisiana is one of many states trying to regulate eBay consignment sellers and drop-off stores.

The FTC submitted comments in support for Louisiana Senate Bill 642 (SB 642), which would change the statutory definition of "auction" to exempt TAs from the LALB's licensing requirements.

In its statement, the FTC representatives stated, "TAs provide a valuable service to those who want access to online markets, but prefer not to sell goods themselves through online auction house. Further, given their relative experience using online auction houses, TAs are likely to be able to sell goods more effectively than their clients, by, for example, choosing the best mode to sell a particular item."

The FTC document goes on to talk about the effect of regulation on the competitive nature of consignment selling. The requirement that TAs obtain an auction business or auctioneer's license "is likely to increase the price that TAs in Louisiana charge for their service. First, it is likely that TAs will pass on a portion of the increased costs that they must incur as a result of licensing requirements to consumers in the form of higher prices. Further, if the total licensing costs are significant, some TAs and others may stop providing online auction and retail services altogether. If the current LALB policy reduces the number of TAs, the price of those services is likely to rise, making both potential sellers and potential buyers worse off. The presence of fewer competitors may reduce competition on price and quality among TAs and increase market power for market participants."

The FTC document said the letter "does not necessarily represent the views of the Federal Trade Commission or any individual Commissioner. The Commission has, however, voted to authorize us to submit these comments."

The FTC press release includes a link to a PDF file of the full document.

http://www.ftc.gov/opa/2006/06/laauctions.htm