A recent ruling by the European Court of Justice which stated that eBay has liability for the selling of counterfeit goods on its pages offers food for thought on the motley phenomenon of online auctions.
EBay is a well-known website where registered users offer goods for sale which are purchased through a procedure which is in many respects similar to that of an auction. In fact, starting from a minimum price, the goods are “sold” to the party offering the highest price within a certain time limit. However, we should ask ourselves whether a genuine auction takes place on eBay and, consequently, what specific area of legislation should be applied.
What is meant by the term “online auctions”?
The expression “online auctions” may refer to different practices not all of which may be defined as genuine auctions.
The main distinctive feature is the role played by the auction house itself: in a genuine auction, the auction house carries out a series of operations for which it takes responsibility, ranging from guaranteeing the procedure is carried out correctly to providing detailed information on the goods at auction.
However, it is not rare for operators of sites where online auctions are held to limit themselves to providing potential buyers with the technological platform and refraining from carrying out any operation regarding the completion of the negotiation process. In other words, in these cases site managers can be compared to service providers and as such, subject to the provisions under Italian Legislative Decree no. 70 of April 9, 2003 which, as is well known, exempt the provider from a general obligation to monitor the information transmitted or stored, or from a preliminary investigation into facts or circumstances pointing to the presence of any illicit activity.
Are online auctions prohibited?
Art. 18, subsection 5 of Legislative Decree no. 114 of 31 March 1998 forbids online auctions, in the strict sense of the word, through the use of television or other means of distance communication. However, we would like to draw attention to the following point: not all online auctions are prohibited, but only those that are conducted between professionals and consumers. In more precise terms, as indicated by circular No. 3547 / C dated June 17, 2002, the ban only affects retail operators who conduct a direct sale to the final consumer. The reasoning behind this ban is clearly to avoid consumers from making purchases which are injudicious or not made in complete awareness.
From this analysis it emerges that it is only through case by case verification that we will be able to distinguish genuine online auctions from similar negotiation practices between a professional vendor and a consumer on which provisions on distance contracts referred to in Legislative Decree no. 206 of September 6, 2005 are applied.