Today, BidRivals announced that it will close operations in Denmark. This is because of a new Danish law that aims to protect consumers. According to this law, all the bids towards a lost auction should be refunded to the bidders. Of course this cannot be done if the penny auction, BidRivals in this case, is to make a profit, so they closed down.
According to them, they have only a small presence in Denmark and so it shouldn't affect their business a lot. However, Denmark has created a precedent and more countries might follow suit. BidRivals is especially in a vulnerable position because it doesn't have the Buy Now feature on all auctions - a huge drawback compared to penny auctions like Quibids.
There was a legal statement drawn by BidRivals that showed a legal opinion on why penny auctions are not gambling, but it is hard to rely on.
Europe has historically been ahead in terms of protecting consumers than the US and I think the first signs of trouble for the penny auction industry might come from there with legislatures looking to limit risk. I think penny auctions like Quibids are relatively safer owning to their Buy Now feature, but I am not too sure about sites like BidRivals.
What do you think about penny auctions?
According to them, they have only a small presence in Denmark and so it shouldn't affect their business a lot. However, Denmark has created a precedent and more countries might follow suit. BidRivals is especially in a vulnerable position because it doesn't have the Buy Now feature on all auctions - a huge drawback compared to penny auctions like Quibids.
There was a legal statement drawn by BidRivals that showed a legal opinion on why penny auctions are not gambling, but it is hard to rely on.
Europe has historically been ahead in terms of protecting consumers than the US and I think the first signs of trouble for the penny auction industry might come from there with legislatures looking to limit risk. I think penny auctions like Quibids are relatively safer owning to their Buy Now feature, but I am not too sure about sites like BidRivals.
What do you think about penny auctions?
