Auction site pulls pirated software titles

A New Zealand online auction site has removed some of the software for sale on its site, because of concerns about piracy. Trade Me owner Sam Morgan says some users notified him that software advertised on the site was probably pirated.

A New Zealand online auction site has removed some of the software for sale on its site, because of concerns about piracy.

Trade Me owner Sam Morgan says some users notified him that software advertised on the site was probably pirated.

He says the "CDR" in the title of one product (Office 2000 CDR) gave away that it was a cut CD and the prices requested were also far too low.

Morgan revoked that person's membership, sent him an email explaining such items could not be sold on the site and removed the items (which included the latest version of Microsoft Office, Windows and Linux) from the site.

"I'm in the process of trying to consolidate the terms and conditions I've got on there."

Morgan isn't sure what his liability will be. "It's a bit scary - I haven't consulted a lawyer yet but I think it's a bit like a newspaper which advertises a stolen car - I'm not in control of the content. Without screening everything that goes in there, I can only really take retrospective action on it."

He says it's a difficult issue for an automated auction site, as users maintain their own content.

This is not the first time Morgan has had to disable someone's membership, but it has been for different reasons in the past.

"Mostly just abusing the site and putting in stuff that's rubbish. One guy put his girlfriend up for sale. I have to look through the con-tent and make sure it's not out of line."

The world's best-known online auctioneer, eBay has also faced problems recently. It's under investigation by the New York City Department of Consumer Affairs and is the target of a federal investigation into possible illegal transactions in connection with the company's site. eBay also recently won a restraining order against one of its sellers who was allegedly offering banned software through eBay.

Craig Horrocks, managing partner of law firm Clendon Feeney, says the issue is not a new problem for auctioneers.

"It's a question of: is there a factor which puts the auctioneer on notice and makes the auctioneer bound to enquire?" He compares it to a motor vehicle dealer.

"If a 16-year-old hood turns up with the latest model Mercedes - you could find it rather difficult to explain to the police why you purchased it for $5000."

Horrocks says Morgan did the responsible thing by removing the offending items and contacting the seller.

However, he says any online auctioneer should look at their terms of trade very carefully.

All domestic auctions of domestic goods are covered by the Consumer Guarantees Act, which you can't contract out of.

An auctioneer may not be criminally liable if they are unaware a product is pirated. However, a buyer might be able to argue that under the act, the auction house will take steps to ensure the goods are legitimate.

Horrocks says there is a criminal offence under the Copyright Act under which an auctioneer could be held liable, but there has never been a prosecution.

The auctioneer doesn't represent the ownership of the goods ñ that's vested with the seller.

"The auctioneer is there to carry out a commissioned service," he says.

While New Zealanders are covered under the country's legislation, most sites have a global reach, so Horrocks warns you can't assume the buyers will be in New Zealand.

(See www.trade me.co.nz.)

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