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EBay Hears And Sees No Evil, It Just Sells It

Is eBay Adam Smith's perfect market, where prices are set by the honest interaction of buyers and sellers and everyone goes home happy--or is it simply the perfect vehicle for price gouging--and much, much worse? The short supply of Microsoft's Xbox 360 means the game system is now fetching up to $1,000 on eBay. Fair enough, if a gamester really can't wait a few more weeks to play the 360 version of Call of Duty 2 or NBA Live 06 then it's their money, right? Sure, but eBay's willingness to turn
Is eBay Adam Smith's perfect market, where prices are set by the honest interaction of buyers and sellers and everyone goes home happy--or is it simply the perfect vehicle for price gouging--and much, much worse? The short supply of Microsoft's Xbox 360 means the game system is now fetching up to $1,000 on eBay. Fair enough, if a gamester really can't wait a few more weeks to play the 360 version of Call of Duty 2 or NBA Live 06 then it's their money, right? Sure, but eBay's willingness to turn a blind eye to scalping, copyright infringement and the sale of questionable goods has a darker side that proved very convenient for a creep named Peter Braunstein.Braunstein, of New York City, is a former fashion writer and playwright who's gone off the deep end in the worst way. On Halloween, he allegedly impersonated a firefighter to gain entry to a former co-worker's apartment. Inside, he's alleged to have used chloroform to render the woman unconscious. What followed was a series of sexual attacks that lasted more than 12 hours.

Braunstein, now a fugitive, got everything he needed to act out this sicko scenario on eBay because, after all, "Whatever it is, you can get it here." Or so the online auctioneer boasts. For Braunstein, "Whatever it is" included the firefighting gear, law enforcement badge, potassium nitrate and chloroform that he allegedly used during the crime.

(In an appalling act of bad taste, given the nature of the offense, eBay has not removed Braunstein's transaction history from its site. A search under the buyer name "Gulagmeister" reveals exactly what he purchased, how much he paid, and the feedback he left and received. One seller is miffed that Braunstein never paid for a voice changing device that makes the user sound like Nip/Tuck's psycho character The Carver.)

"Whatever it is" also includes other items that a deviant like Braunstein, or a terrorist, might want. Innocent, everyday notions like mace, taser cartridges, an NYPD police badge and handcuffs. How does eBay get away with listing stuff that, in many cases, would be unobtainable from a brick-and-mortar store without proper credentials or a background check? The dubious goods often carry modifiers like "antique" or "replica" or, like the cop's badge, "vintage." Problem is, most of these things can be made to function or look like the real thing with minor modifications.

EBay's official policy is that it selectively disallows the listing of "firearms, weapons and knives." What's not stated, but might as well be, is that, "Pssst, we're easily fooled, you know, easily fooled." EBay will record sales of more than $4 billion this year, much of that from transaction fees. A cynic might conclude that the company does not want to mess with its golden goose.

This might also explain why eBay is so easily "tricked" by laughably transparent efforts to circumvent other policies--like its no scalping rule. You've probably seen, for example, a $1,200 Red Sox T-shirt that, as an added bonus, comes with a free pair of tickets to Fenway to see a game against the Yankees.

Then there's eBay's booming business in grey market software. Want a copy of Windows on the cheap? Just search the site for "XP" and "OEM." Somehow, there are dozens of sellers openly violating Microsoft's policy of not allowing the resale of its OEM software to third parties. And people complain about China.

Because eBay is largely an automated, online store, it lacks the human, common sense element that, in the real world, could prevent fraud and, in the Braunstein case, tragedy. At a stretch, one could imagine a legitimate use for each of the items that Braunstein purchased, but all of them together? Picture Braunstein plunking all those wares onto a Wal-Mart counter. Even if he escaped the law of embarrassing purchases ("Price check please on the chloroform, fake police badge and potassium nitrate"), how long do you think it would have taken a cashier to become suspicious?

It's a question worth asking because Braunstein did buy all of his items at one store--eBay. So maybe what eBay needs is some good business intelligence software that automatically alerts the company when semi-suspicious items are amassed by a single buyer. Ebay could then notify the cops. This isn't a privacy issue. If someone wanders into a hardware store and buys 200 pounds of ammonium nitrate, 100 shotgun shells, duct tape and a road map to the White House, the clerk would be derelict in his duty as a citizen if he didn't tip off the cops. In these times, eBay needs to be a better corporate citizen, and maybe improved technology and less corporate profit seeking would help it get there.