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E-bay and Sony removing PS3 auctions -- ethics vs. legality [update 1]

Yes, this will be an attempt to educate you. No, it won't be painful. Let's first talk about what is ethical and what is legal. By the end, you may or may not agree, but the conclusion is that buying a system and re-selling it on eBay is, indeed, illegal and unethical.

Let's first look at the act of buying a PS3 and turning around with the full intent to sell it at a much higher price. Note, it is your intent to sell it at a higher price. This is called scalping (think of the people who by popular football game tickets and tries to sell them for a very high price outside of the stadium) and scalping is illegal.

Secondly, the act is unethical (more subjective, but think about the definition of ethical) because it is not honorable nor moral to buy a system with the full intent of making a profit off of someone who is desperately trying to get a hold of the system (maybe their job hinges on getting the system for some odd reason).

With these perspectives in mind, can we blame eBay and Sony for taking down PS3 auctions? We say no. In fact, I support the move. In a perfect world, the people who truly want the system for personal enjoyment should be able to get it without having to pay a foolish amount. No, they aren't being told to pay that higher amount, but what other choice do they have if they want to get it for little Timmy for Christmas, or so they can properly report and review new games that come out? Commence counterpoints or applause. Applause is nicer, though.

[update: it should be clarified that the auctions being removed account mainly for the violations of the Terms of Service on eBay -- not so much "for the heck of it"... and there's no personal agenda here (no mention was made of the three people in line in front of a certain person who made it clear they only intended on reselling on eBay), just an interesting perspective on "American capitalism" vs. "Moral views". Thanks for all the responses! They're all great.]

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21. Let´s take a guess on how many ebay-PS3 that goes to Europe. My guess is 60% of the ones that can send the unit worldwide.

Posted at 3:47PM on Oct 12th 2006 by Foppe 0 stars

22. $2K for a console? Only if it can destroy a planet or take me back in time when consoles didn't cost an arm and a leg.

Posted at 4:00PM on Oct 12th 2006 by Sneak 0 stars

23. Good call, Ebay and Sony! Finally, ethics rares it's invisible head in the market place. I don't like the idea of the PS3 being used to rip people off anyway. It's bad enough that the console is being sold at such a high price without someone trying to cash in on it's limited availability- not to mention taking advantage of some dimwit who's got more bucks than brains.

Posted at 3:43PM on Oct 12th 2006 by Keil Joy 0 stars

24. To me it's unfair that someone who DIDN'T get up early and wait in line believes they are entitled to the same system *at launch* when they knew that supplies would be extremely limited.

Charging someone $1600 (or whatever) extra for what essentially comes down to waiting in line for them is not ripping them off. They know what they're spending and they choose to spend it. ANYONE who buys the PS3 off of Ebay for $2000 knows that it would be $600 in the store - but they're choosing the spend the extra money to get it sooner rather than later.

A couple months ago I was looking for a copy of Phoenix Wright for my DS in stores, but it was sold out all over. But on Ebay, it was selling for $60 - for a $30 game! That's a 100% mark up! Where were people then?

Getting a PS3 at retail cost with limited quantities will be difficult, but not impossible. If you want one, odds are you can get one if you are willing to wait in line for a long time. Others will choose to pay a high premium price rather than wait in line in the cold. That's their choice, and neither that nor selling it is illegal or unethical. It's the market economy.

As for Sony wanting to stop this from happening - maybe you all should be mad at them. They are the ones launching the system with so few numbers. They could have just as easily held off until next year to launch with millions in hand, but they chose to launch with a limited supply TO GET PRE-CHRISTMAS SALES. For money.

Posted at 3:53PM on Oct 12th 2006 by Jason 0 stars

25. What about the people who arn't able to get to the gamestops or eb games 10 hrs before launch. Should the peole who don't even want a ps3 get 1 before them?
Or how about those who were 8th in line and their eb got 7 they still sat in line for hours on hours (hinting at some1 specific there)
How about this scenario:
You go to a fair and see that all the kids love cotton candy. So you go and buy it all up. Then you say to the kids: If you want cotton candy then you gotta pay me $200. O yeah, and if you try and go to the next vendor, he'll be out too cause my friends went and bought him out too. You can tell these slightly more naive kids about the rules of economics and how its just capitalism, but does that justify what you did?
How about the kids who worked hard the entire summer to get enough money for this cotton candy just to have it bought by you. Yeah, tell them that they should have shown up earlier and they wouldn't have to pay this extravagent sum. The only problem is the fair starts during school. Or they had to wait for a ride from their parents because they can't buy a car themselves. Or they were visiting their dying grandparents in the hospital while you were scheming to swindle their last few pennies of inheritance away from them.

O yeah, you ever remember reading those "Not for resale" signs and thinking "Why do they even have those tags on there. Its for people like you who are willing to destroy the innocence and youth of America to make a few dollars. If thats not unethical and illegal I don't know what is.

Posted at 4:05PM on Oct 12th 2006 by The Fifth 0 stars

26. here, here, I preordered 8. I had to bribe my way through it though by slipping the clerks extra $ in order to bump people along the way but who cares. I may pay a few friends like 50.00 a piece to wait in line for even more on release day too. I'm going to try for atleast 6-8 more on release day on top of my 8 that I have preordered. I'll be damned if I don't make enough to buy myself a new car and have extra left over for whatever.

Posted at 4:06PM on Oct 12th 2006 by Ebay Seller 0 stars

27. So when are you going to give us a REAL source that Sony is behind the removed PS3´s from ebay instead of just giving us a link to another blogger?
Or if I start a blog writing that Sony will have a secret Europe-launch next week as a big suprise, you will write a article about the secret European launch next week?

Posted at 4:09PM on Oct 12th 2006 by Foppe 0 stars

28. #25.
"Its for people like you who are willing to destroy the innocence and youth of America to make a few dollars. If thats not unethical and illegal I don't know what is."
Strange, around here we call it "The American way"...

Posted at 4:13PM on Oct 12th 2006 by Foppe 0 stars

29. "Its for people like you who are willing to destroy the innocence and youth of America to make a few dollars."

Whaaaat?!

Poor youth of America! They couldn't get a PS3 at launch! They had to wait a few weeks, if they could even afford the retail price tag! Poor, poor things!

Anyone who equates buying a PS3 at launch and selling it to a willing buyer for a profit as being the same as stealing cotton candy from kids at a fair is seriously messed up.

Posted at 4:14PM on Oct 12th 2006 by Jason 0 stars

30. Heheh...glad I live in PHX, AZ no waiting in the cold for me! more like waiting in the cool. Heck, me and some friends will go down there set up a hookah and chill for 12 hours...hey did it at a sleepout for the homeless why not to make money too?

Posted at 4:17PM on Oct 12th 2006 by Rob 0 stars

31. "it is not honorable nor moral to buy a system with the full intent of making a profit off of someone who is desperately trying to get a hold of the system"

Couldn't agree more... retail stores, who buy units with the full intention of just turning around and selling them for a profit are scum. I mean, they don't even play them or anything... just take delivery then put them on their shop floors with an inflated price tag!

DOWN WITH COMMERCE!

Posted at 4:16PM on Oct 12th 2006 by Simon 0 stars

32. One other thing - if I went to a fair and bought up all of the cotton candy to resell it for $200 each, you know what would happen?

No one would buy it.

You see, no one thinks cotton candy is worth $200. But some people do think that the PS3 at launch without waiting in line is worth $2000.

You know how the initial price for that beloved cotton candy at the fair was set? BY FINDING OUT WHAT PEOPLE WERE WILLING TO PAY FOR IT. People have an upper limit on what they'll pay for cotton candy. They also have an upper limit on what they'll pay for a PS3.

One last thing - if you're a kid in school, you probably shouldn't be spending $700 on a game system anyway.

Posted at 4:20PM on Oct 12th 2006 by Jason 0 stars

33. "13. Compliance with the Law; Resale Sales and U.S. Government Sales Not Intended. You agree to comply with all applicable laws and regulations of the various states and of the United States and other countries that relate to the Products or this Agreement.

You agree and represent that you are buying for your own internal use only, and not for resale. "
Hows that for illegal?

Posted at 4:29PM on Oct 12th 2006 by The Fifth 0 stars

34. lets see, $2000.00 per PS3, add atleast $100.00 per box for shipping($150.00 if they want it insured) multiply by atleast 8(hopefully more like 16) and that makes for one good 'ole ebay buyer raping good time.

Posted at 4:33PM on Oct 12th 2006 by Ebay Seller 0 stars

35. Mmmm. I love cotton candy.

To all the whining 7th graders in this comment thread, guess what? I showed up at Gamestop 30 minutes before it opened, and I got one. In fact, I was not even going to buy one until a friend called me and said it might be worth checking the line at the local Gamestop.

You know what? I could care less about the PS3. I don't want one. But I know other people do. And you know what happens when there is demand for something? People step forward and supply it. And the suppliers usually make money in the process - if they are smart.

Kids, that's how our economy works. You'll probably learn that in 9th grade, so you might have to trust me for now.

You can have my PS3, just look for it on eBay in a few weeks. I think I'll no-reserve it and see what the market says it's worth.

Posted at 4:35PM on Oct 12th 2006 by Phil 0 stars

36. Ok i'll even admit ebay seller that's a little f'ed up, i'm reselling one to pay for mine. I can't believe your only going to pay your friends $50 bucks when you may make over $1400. You're just a heartless bastard...but hey everyone's got their hustle.

Posted at 4:37PM on Oct 12th 2006 by Rob 0 stars

37. @The Fifth,

Quoting a terms and conditions agreement does not make something legal or illegal.

If it's illegal to sell a PS3, then it's illegal to sell ANY game or system, so I guess Gamestop themselves and many who shop there break the law on a daily basis selling video games.

In gact, the line you quoted is a very standard license enclosure as it's designed to protect the manufacturer from having liability when someone buys and sells something without their direct knowledge. Basically, it amounts to a hold-harmless clause.

Posted at 4:41PM on Oct 12th 2006 by Jason 0 stars

38. " Charging someone $1600 (or whatever) extra for what essentially comes down to waiting in line for them is not ripping them off. "

On one hand, i agree. People should be allowed to be dumb enough to give you their money. But on the other hand, buying PS3s with the sole intentions of reselling it to buyers at an inflated price is scalping; I don't care how you slice it, that's not capitalism. that's a hustle! take into account all the people who only got up early so that they could secure themselves a huge profit for later. That alone can cut off the availability of the console from many would-be buyers. I'd rather sell something that i created to someone who's going to take advantage of it's intended use.. as opposed to someone who's only going to use it to take advantage of others.

Posted at 4:44PM on Oct 12th 2006 by Keil Joy 0 stars

39. Remember, nobody is selling actual Playstation 3 consoles only preorder slips. Ebay is not going to be able to stop "scalpers" from selling actual consoles when they are available, and why would they? If somebody actually wants to buy a PS3 at that price, let 'em. They're probably rich to begin with. And remember, that first run consoles are full of problems and have a high failure rate.

Posted at 4:55PM on Oct 12th 2006 by Ryan Zelon 0 stars

40. ROFL..... ebay removed the ps3 auctions b/c it violated terms of service (since they couldnt deliver it in 30 days). In a week- ebay will be buzzing. Nice scare tactic though- "ebay teaming up with sony". Sony is even allowing retailers in Japan to have "open" pricing- seems like everyone will be making money. By the way I have owned every game system since I was little, and I always got screwed over by the big bad game companies who would barely support their product- Im looking for a little payback. I also donate hard to find items to schools to raise money- are these schools that raise money unethical???lol

Posted at 4:50PM on Oct 12th 2006 by IhaveTONSofPS3s 0 stars

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