Yahoo! To Ban Nazi-Related Auctions

Responding to pressure from anti-hate groups and concerned users, Yahoo! announced late Tuesday that beginning January 10th, it will ban auctions of Nazi artifacts and other items “that are associated with groups which promote or glorify hatred and violence.”

Although the Santa Clara, California-based Internet powerhouse said that the move was not directly related to French Judge Jean-Jacques Gomez’s November decision requiring Yahoo! to bar French users from Nazi auctions, the new ban may bring the company into compliance with the ruling.

Yahoo! Auctions senior producer Brian Fitzgerald told the E-Commerce Times that the company had been discussing the change even before the French suit against Yahoo! was filed in April.

“We are not interested in promoting businesses that profit from hate-related material,” Fitzgerald said.

Screening Listings

Although Yahoo! told Judge Gomez that it would be technologically impossible to bar users from France from viewing auctions of Nazi memorabilia on its U.S.-based auction site, the company has developed a filter to screen auction, e-commerce and classified listings before they are listed.

Any items that appear to violate the company’s ban on hate-related items will be automatically rejected, though users will be able to appeal rejections to a human being. In addition to the filtering technology, the company said it will rely on “trained representatives who will monitor the site regularly.”

“Our monitoring program will further help ensure that the listings on our auction site comply with our Terms of Service,” Fitzgerald said. “We are committed to reviewing and updating the program to be most effective. We also continue to encourage our consumers to notify us when items appear to be inappropriate or illegal, based on our policies.”

Typically, online auction houses have only rejected objectionable items after receiving complaints from users. In the past, some have pulled attempted auctions of human organs, marijuana and even the U.S. presidency.

Victory for Anti-Hate Groups

Yahoo’s decision, which according to Fitzgerald was made after user surveys and conversations with buyers and sellers at Yahoo! Auctions, represents a major victory for anti-hate groups, particularly the three organizations — the International League Against Racism and Anti-Semitism (LICRA), the Movement Against Racism (MRAP) and the Union of French Law Students (UEFJ) — that filed suit against Yahoo! in April.

The lawsuit charged Yahoo! with illegally hosting auctions that amounted to a “banalizing of Nazism.”

In the U.S., some activists lobbied Yahoo! to end its Nazi-ware auctions. BiasHELP, an anti-hate group based in Huntington, New York, asked the Web giant last year to stop accepting Nazi- or Ku Klux Klan-related items for sale over its site.

Case History

Selling or displaying any items that incite racism, including Nazi artifacts, is illegal in France. No such items are offered on Yahoo’s French auction site, but French users have been able to access Yahoo’s U.S.-based auction site, where sales of Nazi memorabilia are allowed.

In November, Judge Gomez gave the Internet powerhouse 90 days to bar French residents from viewing auctions of Nazi memorabilia at its U.S.-based auction site, or face fines of US$13,000 per day for each day it exceeds the deadline.

On December 21st, Yahoo! filed documents in U.S. federal court declaring that the French government has no right to make the company bar French residents from seeing auctions of Nazi paraphernalia over its U.S.-based Web site. Yahoo! spokesperson Nicole Kennedy told the E-Commerce Times that the case was still pending and that there were no new status reports.

Listing Fee

Yahoo! also announced Tuesday that beginning on January 10th, it will charge auction users a listing fee of 20 cents to $2.25. Fees will be assessed on a sliding scale and will be based on the starting and reserve prices of the items. Unlike other sites, Yahoo! will not charge a closing fee or take a percentage of the final price.

“We believe a nominal listing fee will ultimately further improve the quality of our auctions service, thereby providing our buyers and sellers with an even more compelling experience,” Fitzgerald said. “Because we are not taking a commission and the fee is minimal, we are increasing the quality of listings while remaining price competitive and providing sellers with a better margin.”

Yahoo’s decision to start charging a listing fee was not unexpected in the user community. According to postings on the Auction Watch message board, at least one user was assessed a fee as early as December 27th.

After the user complained to Yahoo! billing, the charges were removed and the user was told that Yahoo! engineering was working on the system and that the charges would be removed.

Wall Street Cheers

In general, with the popular portal’s advertising revenues shrinking and its stock price sliding, Yahoo! has been considering the addition of fee-based services, including subscription-based features such as an online music service.

Analysts are applauding Yahoo’s decision to begin charging sellers to list items, according to published reports. Merrill Lynch analyst Henry Blodget said in a research note Wednesday that the listing fees would diversify Yahoo’s income and could contribute $30 million to $80 million of revenue this year, or 3 to 5 percent of total projected revenue of $1.4 billion.

U.S. Bancorp Piper Jaffray analyst Safa Rashtchy believes the auction fees could add 5 cents a share in earnings in 2001.