With the tremendous success of online auction sites such as eBay, companies of all kinds have added auction capabilities to their Internet web sites in order to attract users and add excitement. However, running an online auction of either type poses a variety of potential legal pitfalls that should be carefully considered before launching. This article will discuss some of the most important legal issues associated with operating online auctions, and ways to reduce legal risks that can arise from adding an auction to a company's web site. Of course, an auction website needs to develop a set of practical rules governing how users sell goods and place bids on the site. Privacy Issues .
Most auction sites require that users, both bidders and sellers, register before participating.
The registration process usually involves collecting some user information, including name, address, phone number, etc. Once a company posts a policy, it must be sure to adhere to it to avoid potential liability. However, to the extent foreign nationals are permitted to participate, companies must be aware of international privacy laws and regulations. The EU Directive on the Protection of Personal Data, which took effect last October, generally requires processing of personal data only upon an individual's specific, informed, and unambiguous consent. Terms and conditions are usually accessible through a link at the bottom of the home page of the site and do not require viewing or consent.