Auction sites set to trade punches

By PETER GRIFFIN

The country's largest online auction site, Trademe.co.nz, has locked horns with emerging competitor Oneway.co.nz in an acrimonious fight that looks destined to boil over into a defamation case.

Having shown a willingness to defend its customer base and reputation as the number one local auction site in the past, Trade Me has accused Oneway of taking member information from its site to generate feedback criteria for the same members who also have accounts with Oneway.

Feedback criteria note statistics and remarks on the integrity of a buyer and seller and may influence whether a person wishes to enter in trade with them.

Trade Me also attacked the credibility of Oneway's management and has threatened to close the accounts of Trade Me members using Oneway.

The latest stoush appears to have emerged out of an email Trade Me sent to select customers informing them of new fee changes for "bulk sellers" using Trade Me's website.

Oneway's founder, Shane Anderson, took exception to the e-mail and gave Trade Me's general manager, Nigel Stanford, until Sunday evening to retract the e-mail. Yesterday he said he was taking legal action.

Customers looking to sell goods via Trade Me do not pay to list their wares, but are charged a fee if they make a sale - just under 5 per cent of the final sale price.

Trade Me owner Sam Morgan said a number of retailers were flooding its product categories with products that weren't selling and therefore generating no revenue for the website.

Customers were increasingly being presented with retail pricing - not the deals they were searching for.

"If you go to Trade Me to find a good bargain you're being hit with catalogue pricing," said Morgan.

Of the 40,000 sellers who listed goods with Trade Me each month, Morgan said, a small group of around 50 were considered to be bulk sellers.

"Rather than bringing in wholesale listing fees we're looking at the people who have very low sell through percentages and address those people specifically."

Those bulk sellers were being charged an incremental listing fee of 25c an item. That has pushed some of the bulk sellers into Oneway, which is being run by web designers and businessmen Brett Waterson and Anderson.

Morgan said Trade Me was not averse to competition but had concerns about Oneway.

Feedback information was the "bedrock" that Trade Me was built on and using the information to produce similar feedback criteria for members on Oneway was "illegal".

"They're spidering the feedback information of members of Trade Me and using it to attribute trust to members on Oneway," he said.

Anderson denies the claim, arguing that information on traders did not belong to Trade Me but to the members themselves.

"We do not import it, we simply ask our users if they are trading on another auction site and if you have a trade history, enter the numbers here and we'll put them into your profile once we can confirm it is you on the other site," he said.

He declined to elaborate on Oneway's target market, but said the site did not plan to go head-to-head with Trade Me but would instead maintain a different focus.

"We don't see our core business being the same as theirs, which is really hobby sellers. "

While Anderson said he was proceeding with legal action, Trade Me is also considering its legal options.

Anderson spent 27 days in an Iowa prison held on a hacking charge but claims he is innocent. He was released from prison after accepting a plea bargain and pleading "no contest" but claims he was never convicted. He has posted the legal documents associated with his case on his website (www.shaneanderson.com).

"I was in a business relationship with another person and they decided to tell the police they didn't know me from a bar of soap. I returned to Iowa to the very same place to face these allegations and make sure it was dealt with. If I was guilty there was no way in the world I'd have returned," he said.

In its e-mail to bulk sellers, Trade Me admitted customer service had suffered as growing site traffic took its toll on site-access speeds. The company was looking to hire more staff to deal with customer inquiries.

"It's hard to deliver the level of service right now that we would like because Trade Me is growing in traffic by 10 per cent each week," it said in its e-mail.

Trade Me won a symbolic victory last week when a complaint made to the Advertising Standards Authority about Telecom's advertising was upheld. Telecom had labelled the Exchange Point trading site as "New Zealand's most successful online marketplace".

But quoting figures from internet research Company Red Sheriff, Trade Me successfully argued that traffic to Exchange Point, an ACP website, was just a third of what Telecom was claiming in its advertising and a fraction of traffic to Trade Me.

Telecom retracted the advertising, claiming that an honest error had been made.

Trade Me

Oneway