Small-business owner Barry Fallon was scheduled to appear before the Pennsylvania State Board of Auctioneer Examiners on May 12, 2008, to face charges of conducting an auction on eBay and operating an auction house without a license. Fallon sold his consignment drop-off store in 2007 after regulators required him to get an auctioneer's license to operate the store, which operated as an iSold It franchise.

"It would be wonderful if a lot of Pennsylvania eBay Trading Assistants and Power Sellers could attend this hearing in support of all of us," Fallon said. "A show of strength might help sway their decision. If I am convicted everyone else in the state will be next. Any promotion of such mass show of support would greatly be appreciated."

Fallon said he would be defending himself since a lawyer would cost over $10,000. He faces fines of at least $2,000.

Fallon is not alone in facing government officials who want to regulate eBay sellers. Last year, AuctionBytes documented eBay license requirements of all 50 states (http://www.auctionbytes.com/cab/abn/y07/m05/i17/s04).

The research showed that some states require drop-off stores to hold an auctioneer's license, while others required stores to comply with rules for pawnshops or consignment shops. Other states have no regulations in place specifically dealing with drop-off stores, though some local law-enforcement agencies have interpreted existing laws written for pawnshops and consignment stores to apply to drop-off stores.

Fallon said eBay has not supported his case, and wished it would file a friend of the court brief to explain to the board why he is exempt from the licensing requirement.

eBay spokesperson Kim Rubey said eBay has been in regular contact with Fallon since this issue first came up more than 15 months ago.

"We continue to believe that the Auctioneers Board is incorrectly reading the statute and that people selling on eBay are not conducting an auction under Pennsylvania law. In this case the Auctioneer Examiners Board has set the rules and is acting as the judge of those rules. We believe that is grossly unfair and look forward to a full legal review of the Board's actions."

Rubey said eBay is not a party to the hearing so will not be attending. "We will be watching the results carefully and will determine next steps, if any, following the decision of the Auctioneers Board," she said.

eBay has lobbied legislators in Pennsylvania to pass legislation that would exempt eBay sellers from auctioneer's licensing. The licensing board had agreed to wait for legislation to pass before taking action against him, but Fallon said legislators are dragging their feet and the board got tired of waiting.

Pennsylvania had also charged a home-based eBay Trading Assistant with failing to get an auctioneer's license, but that case became an embarrassment to officials when newspapers picked up on the "heart-tugging" story (http://www.azstarnet.com/allheadlines/224400). The Trading Assistant ran an eBay consignment business so she could stay at home with her ill child. Fallon claims the board dropped charges against her when it caught wind that "Dr. Phil" was going to feature her on his popular television show.

eBay created a program called eBay Main Street to help its members stay informed about regulatory issues and published its position on Auctioneering Regulation on the site (http://www.ebaymainstreet.com/state/auctioneering-regulation).

Earlier this year, eBay put new requirements in place for its Trading Assistant program, prohibiting TAs from using the term "auction" or "auctioneer" in their business names, signage and marketing materials, unless they are licensed auctioneers. It also requires drop-off stores to have comprehensive public liability insurance, casualty insurance, bailee's insurance, a $25,000 bond to protect sellers' checks, business interruption insurance, and Internet insurance (http://www.auctionbytes.com/cab/abn/y08/m01/i17/s01).

Fallon's hearing before the Auctioneer Examiners Board had been scheduled to take place on Monday, May 12, but on May 2nd was continued (postponed), with Fallon finding out just hours before press time. AuctionBytes will continue to follow this story in the daily Newsflash newsletter.

You can hear an interview with Barry Fallon conducted last week on the Ecommerce Industry Soundbytes podcast:
http://podcast.auctionbytes.com