When looking at the legal issues that face the B2C auctions two things are noticed. The first is that there is less time spent making legal decisions when compared to the B2B market place. The second is that there is less worry relating to fraud and security when compared to C2C. Even though, this is the case there are still many issues that come into play everyday as Companies sell their goods to their customers through their auction sites.

Fraud:
The largest fear and legal issue online is that of fraud. However, this legal issue has less of an impact on B2C then it does for C2C. Many of the businesses selling through online B2C auctions have a long standing relationships with the customers who do business with them. This differs from the C2C arena where buyers usually have no previous relationship with the seller.

Delivery Performance Guarantee:
During the 1999 holiday season, many companies made promises to deliver their goods in time for Christmas. However, do to unforeseen demand many of their promises failed. From that point on B2C online retailers have had to take a close look at the delivery performance guarantees in order to prevent potential class-action lawsuits brought by dissatisfied customers. Veteran Internet law expert and author of Internet and Technology Law Desk Reference, Michael D. Scott, warned that retailers need to protect themselves from possible litigation resulting from dissatisfied online shoppers.

The case presented above dealt with the legal issues of companies offering their own auction site. When it comes to companies that are using a third party site to auction off their goods most of the delivery contacts are made between the third party site and the consumer. Having the table turned creates a new difficulty for the seller. Will they be able to meet the third parties demands? If a company cannot then there are some other options.

"For companies that don't meet our pick, pack, and ship standards or don't have the technology, we created what we call our 'Dell solution.' They move their inventory into this third warehouse -- they take the risk, they own it, but we will manage it," said Richard Schwartz, founder of Nordstrom.com, who now serves in an advisory role.

Delivery Performance Guarantees are very important as more and more companies offer their goods online. Since Internet companies are being built and funded primarily on the basis of the power of their brand among consumers, it is vital they do everything they can to protect that brand from dissatisfied customers. The customer is always right.

Monopoly:
Currently there is no killer portal that gains all of the B2C auction dollars. However, one site comes to mind when you think of auction, eBay. eBay is the number one player in the C2C market place. Yet, they are gaining little of the B2C auction dollars. According to eBay 80 percent of its sales are made by 4 percent of its sellers. The 4 percent that made all of the sales on ebay were small retailers. From this one question could be why is eBay not targeting all of the B2C commerce. One reason could be the fear of intervention by the Federal Trade Commission, which is looking at the big players to see whether or not they are using exclusionary tactics.

"Hypothetically, if a single exchange becomes dominant in an industry, there is an antitrust doctrine [over access to that exchange] that might come into play," said Susan DeSanti, director of policy planning at the FTC. "It is not clear what the solution would be, but there are questions about should exchanges be obligated to let everybody in or should they be obligated to make the exchange nonexclusive so vendors can participate in other [exchanges] as well."

Case Study: Sante Fe Natural Tobacco v. Spitzer

Facts
Sante Fe brought suit to prevent the State of New York from enforcing Public Health Law Section 1399-11. The law effectively allowed only in-state retailers to conduct cigarette sales in New York, other then to wholesale dealers or exporters. No sales were allowed by mail order to smokers.

Legal Issue
Does New York Public Health Law Section 1399-11 violate the Interstate Commerce Clause?

Opinion
Yes, 1399-11 violates the Interstate Commerce Act. New Yorks ban on Internet cigarette sales was only there to protect the in-state retailers from the competiton of out of state retailers.

Discussion
The commerce clause provides the courts with the power to invalidate state legislation that interferes with interstate commerce. The fact that New York was trying to ban the sales of cigarettes from sellers outside of the state seemed to only benefit the in state retailers. New York has the right to try and discourage people from smoking. However, this was not the case instead of banning all tobacco it was just discriminating against out of state sellers.

From this example one can see that as the use of the Internet becomes more and more prevalent the Commerce Clause is going to have a significant role in the development of B2C auctions.