By: Kim Verska

Kim Verska — Wed, 27 Aug 2014 20:01:00 +0000

As the outsourced GC of the biggest player in the online market for firearms (www.gunbroker.com), I thought I’d provide a bit more background into why the outcome in this case could be looked at as possibly surprising in terms of the court’s analysis, and extremely good news for this industry segment. It’s all about the way the various websites are structured, and Armslist might have been a good candidate for an adverse ruling because in a sense, it is “putting [this segment of the industry’s] worst foot forward.”
The online marketplace for guns is characterized by a few really big players and then innumerable fly-by-night websites. Here are the stats for the big players based on my client’s best estimates and publicly available data from Quantcast:
http://www.gunbroker.com — 4.5M unique visitors per month, 600,000+ items for sale
http://www.armslist.com — 2.3M uniques per month, ~90,000 items for sale
http://www.gunsamerica.com — 800K uniques per month, ~45,000 items for sale
http://www.gunauction.com — 550K uniques per month, ~30,000 items for sale
Armslist, together with the other two smaller competitors, is structured so that buyers are able to search only for items located within the buyer’s own state. This is to allow such buyers to “legally” take advantage of what is sometimes called the “gun show loophole,” but which is really just an exception in federal law to the background check requirement for cases when a non-dealer makes a non-interstate sale of a firearm. (You know, that whole federalism thing!) Anti-gun advocates such as Bloomberg’s group point out that many sellers on these sites sell time and time again, raising the question of whether they are properly seen as falling within the exemption for non-dealers. Buyers, not being stupid, search out these sellers in their own state if they want to evade the background check.
Just a note here to say that GunBroker.com does not allow searching by state of location and requires ALL firearms to be transferred between seller and buyer via a licensed dealer including background checks in EACH case. So while there may be users violating the law on the margins on GunBroker.com, it is far more difficult to do so, especially with firearms. The case of GunBroker.com demonstrates that it is possible to structure an online marketplace for firearms in a way that does not lend itself to illegal activity.
In any case, now you see why Armslist appeared to be a possibly fertile field for an allegation of negligence or perhaps conspiracy to break the law. I suspect that the 9th Circuit might have had a different conclusion….but in any case, the 7th Circuit case was good news to my client as well.
Follow me on Twitter @verskette

Comments on: Online Marketplaces Facilitating Gun Sales Don’t Kill People. People Kill People (Forbes Cross-Post)

By: Kim Verska