Net retains its Wild West atmosphere

Information Technology may be an industry that's always doing the unexpected, but observers were startled, to say the least, at the news last week that highly profitable online auction site and Internet darling eBay (www.ebay.com) was facing a US federal investigation.

One of the few profitable sites on the Web, eBay has experienced an astonishing rise and rise. People seem to love the concept of this Buy and Sell of the Internet, and at any given moment millions of items, from automobile parts to Elvis memorabilia, are up for grabs. eBay makes its money by taking a percentage of the sale price from the sellers who flog their wares to the Net's global audience.

The probe - highlighted by the curious fact that eBay waited a month to admit that it had been contacted by the authorities - is yet another pointer to the difficulties (or, as Americans would optimistically say, "challenges") of doing business in a medium which is nearly impossible to regulate.

The difficulties in this case come not just for the site owners but also for those who buy and sell on the site. While the thrust of the investigation surrounds "possible illegal transactions in connection with the company's site", as eBay's brief press release stated, there's a second investigation already under way, spearheaded by the New York City Department of Consumer Affairs. The second investigation centres on concerns about possible cases of fraud perpetrated by sellers on the site.

Only a few weeks before, eBay had already acknowledged that the site needed tighter fraud controls and had announced a range of measures it said would make both buyers and sellers more accountable. Until then, the only way a buyer could check the seller's trustworthiness was by clicking to a page of evaluations offered by previous customers.

The investigation, on the other hand, seem to be focusing on whether items being offered for sale are legal to sell, although eBay would not elaborate.

Others have already raised questions about the nature of the goods available on the site. Microsoft is investigating the sale of possibly-pirated software on eBay.

There were also concerns about the open sale of guns on the site, because buyers potentially could avoid various state and federal regulations. These restrict who may buy guns and, in some cases, determine how long they must wait before the weapon is handed over following its purchase, while checks are made on the buyer's background - eBay has banned the sale of guns.

So what sort of protections should there be on an auction site like eBay?

Or, perhaps more pointedly, what type of workable regulations can be imposed? Fraud is a serious problem on the Net and is certain to grow. There is currently no sure way of telling whether an online vendor is reliable and honest, or selling bona fide goods and services.

And how do you track someone down when their place of business exists only in a virtual space on a server? Even high profile e-commerce sites have offered shoddy, and in some cases downright questionable service, as consumer complaints illustrate. On the other hand, how much responsibility must sites carry when they are a medium for e-commerce between others, rather than vendors themselves?

Some try to argue, rather facetiously, that a sucker is still born every minute and the Internet industry isn't responsible for their lack of good sense. But setting aside the fact that even suckers certainly deserve protection, these questions concern us all. Creating a flourishing e-commerce environment depends on finding the answers.

At the moment, the Net retains its Wild West atmosphere - hard to map, hard to govern, hard to regulate. Those qualities are not just intrinsic to it, but like the vast expanses of the uncharted western USA in the last century, are in great part the features which have fuelled its wildfire growth, launched new industries and opened breathtaking (and sometimes fearsome) possibilities for economic and social change.

Wacky cults, obsessions with tofu and Hollywood aside, the West was eventually tamed and now forms the bedrock of the US economy. But the process was a drawn-out and painful one as the values of one unruly world slammed against the money-men, officials and more staid mores of the 19th century establishment. We're just entering an equivalent moment on the Net, and where we end up is still anyone's guess.

Klillington@irish-times.ie