April 16, 2003

Attorney General Hands Down eBay Opinion to DBW

The California Attorney General has rendered a formal opinion that the activities of eBay, Inc. in connection with the purchase and sale of previously owned yachts do not require eBay to be licensed as a yacht broker under the provisions of the Yacht and Ship Brokers Act.

The opinion was handed down in response to a request from the California Department of Boating and Waterways following inquiries from the boating community as to the practice of boat owners advertising their vessels for sale on the eBay Internet auction Website.

Boating and Waterways administers a consumer protection program for the licensure of persons engaged in the brokerage sale of used vessels, under the Yacht and Ship Brokers Act, which is similar to the law governing brokered real estate transactions.

The Attorney General examined eBay's activities in the light of four tests, the performance of any one of which would be sufficient to require eBay to obtain a broker's license: 1)sells or offers to sell, 2) buys or offer to buy, 3) solicits or obtains listings of, or 4) negotiates the purchase, sale or exchange of previously owned yachts. The Attorney General found that eBay does not perform any of these activities as defined in law.

The Attorney General concluded, "It is evident that the primary purpose of the [Yacht and Ship Brokers] Act is to provide protection for consumers through the licensing and regulation of yacht brokers.... with respect to the activities of eBay, a yacht buyer does not rely on the honesty or truthfulness of any statement made by eBay... or upon eBay's knowledge or understanding of the principles of the yacht brokerage profession... in selecting, bidding on, purchasing or completing a sales transaction. Requiring eBay's licensure as a "broker" would thus not further the primary purpose of the Act to provide protection to the public...."

The full text of the Attorney General's Opinion can be viewed on Boating and Waterways' Website, www.dbw.ca.gov/agebay.asp.