Licensing Online Auctioneers Could Hurt Tennessee Economy, Expert Warns

Online auctioneers will suffer, as will Tennessee’s economy, if state officials require them to get a license, which certain members of the Tennessee General Assembly hope will happen this legislative session.

This, according to an official with the Beacon Center of Tennessee, a Nashville-based free market think tank.

As The Tennessee Star reported, a bill going through the Tennessee General Assembly would, for the first time, require a license for certain types of online auctions.

“The vast majority of complaints about online auctioneering came from business competitors who don’t like having to compete with a new business model. And of course, this artificially inflates prices of goods, all of which are passed on to the consumer. It’s not different than a tax hike” said Braden Boucek, Beacon’s vice president of Legal Affairs, in an emailed statement.

Boucek linked to an Institute of Justice study that examined state and national estimates of the economic costs of occupational licensing.

The Institute for Justice is a Virginia-based and libertarian law firm that pursues civil liberties and other public interest cases, according to its website.

“According to this study, over 21 percent of Tennessee’s workforce is licensed. It costs us 46,068 jobs.  We lose $173 million in economic value lost, $4.5 billion in misallocated resources,” Boucek said.

“We could also see nearly a 16 percent increase in economic returns over what licensees would make if not for licensing.”

State Rep. Kevin Vaughan, R-Collierville and State Sen. Ken Yager, R-Kingston, sponsor the bill in question.

Boucek, however, said he agrees with some of the bill’s proposals.

“They make it easier to get a license and run an auctioneering business. But they are attached to this radical expanse in the scope of the license which will require far more types of businesses to be licensed when there is no problem with online auctions,” Boucek said.

The people pushing the law, though, want to eventually make eBay-style auctions require a license, Boucek said.

Vaughan spokeswoman Darlene Schlicher said in an emailed statement that eBay officials sought and received an exemption from Tennessee’s auction laws in 2006.

“This legislation does nothing to change that exemption, nor is it the goal of the proponents to do so in the future,” Schlicher said in an emailed statement.

According to language on the Tennessee General Assembly’s website, the bill, if passed into law, would require the Tennessee Auctioneer Commission to post the names of persons with suspended, revoked, or non-renewed licenses. This, because of fraud and other violations.

But, as reported, Boucek said there are amendments attached to the original bill’s filing that require online auction licensing.

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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected].
Photo “Branden Boucek” by Branden Boucek.