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Sale of art in the online environment.
Part 1: Online marketplaces
The eventual move to the online environment has been on the art agenda for many years in a row. In the last months, however, the situation shifted from a “nice-to-have” to “essential and almost the only way forward”. In the coming couple of articles, I would like to talk about art sales online, highlighting the nuances between different systems of online sales and drawing attention to certain caveats to take into account.
First, I would like to emphasize that online sales are not a single category of sales.
- art can be bought online from a particular marketplace;
- art can be viewed online, while the actual sale still happens in the offline environment; or
- art can be bought online at an auction.
In the latter case, it can also be further split into sales through (1) an online-only auction or (2) sales through a regular auction, which accepts online bidding. While there are a lot of similarities between all of the mentioned types of sales, there is likewise a range of differences and nuances.
In this article, I will start with online marketplaces and in the subsequent — elaborate on the online auctions.
By and large, when art is sold online, one has to take into account not only the traditional laws related to agreements and traditional consumer protection laws but also specific rules and regulations related to distance selling. Depending on the country (of the seller, the online platform and/or the buyer), there might also be other laws to consider, such as related to selling overseas, or to digital sales in the EU, or to direct marketing.
Selling art online calls for providing (collecting and storing) a lot of different information regarding the art offered for sale. Hence, for Europe, there are GDPR rules to take into account for all data collected and stored. Furthermore, in case the distance selling could be invoked, the seller needs to take into account the approval period (or the right of withdrawal, or the right to return —14 days to return the item with “no explanation required”). Besides, the risk related to the delivery of an artwork to the buyer in case of online selling is usually on the seller. That all already sounds quite complex, but let me try to structure it a bit.
These are numerous online platforms, which offer a possibility to buy artworks for the fixed listed price, or sometimes also provide an option of making an offer. In contrast to the auction environment, where several buyers compete with each other in offering the highest price, making an offer most of the time is a proposition to accept a price lower than the listed price, which is then for the seller to either accept or reject.
To give some examples of the online marketplaces, the first one which comes to mind is Saatchi Art — one of the big established names in this category. Saatchi Art on its website has an extensive list of Seller Terms and conditions, as well as Purchaser Terms and conditions and, perhaps, most importantly an extensive Disclaimer on Saatchi Art responsibilities. Moreover, in the Terms there is also an explicit statement: “You acknowledge and agree that, to the maximum extent permitted by law, the entire risk arising out of your access to and use of the Services, Saatchi Art Content, and Member Content remains with you.” (https://www.saatchiart.com/terms). Returns are subject to a 7-day return policy and have as exceptions framed/matted open edition prints, limited edition works and special collection works. For these three categories of artworks, the sale is deemed final. Notable is that the terms include the mutual agreement to arbitrate, which for the US claims would be handled by the American Arbitration Association and for the non-US claims — by the International Centre for Dispute Resolution following its International Expedited Procedures.
Another notable online art marketplace is Singulart. This platform also offers the possibility to either buy an artwork for the listed price or make an offer. The purpose of Singulart is provided in the first article of its General Terms and Conditions (https://d17h7hjnfv5s46.cloudfront.net/assets/build/docs/cgv_en.3a441190.pdf) and states the following: “The purpose of the SINGULART website is to present Artworks from artists to the users of the site, and to give them the opportunity to discover and buy them online directly from the Seller”. Also further in bold typescript, Singulart elaborates that: “The sales made through the Site are contracted directly between the Buyer and the Seller. SINGULART is not, in any respect, a reseller of the Artworks proposed by the Sellers through the Site”. This means that Singulart acts only as an intermediary facilitating a deal, yet in no way as a party to this deal. At the same time, for example, the right of withdrawal is processed by Singulart, as provided in Art.6 of the General Terms and Conditions: “SINGULART will then be responsible for handling the cancellation from the Buyer and shall process the refund within 14 days following the date on which SINGULART was informed about the Buyer exercising his/her right of withdrawal.” The disputes are deemed to be solved by mediation, providing a Consumer Ombudsman as a preferred facilitator.
Before I proceed to the online auctions, I would like to say a couple of words about online viewing. In this context, one cannot ignore probably the biggest player — Instagram. According to the UBS 2020 Art Market report, 61% of High Net Worth collectors across all countries use Instagram to purchase art. The platform provides a perfect possibility to follow the artist, connect with her, and based on that make an informed decision of supporting her by acquiring a piece of her artwork. Initially not created as a marketplace, this social media outlet proves to be a great place to facilitate sales of art. Similarly to other online marketplaces, Instagram is just a venue. The relationship established by the fact of sales is, thus, between the seller and the buyer only.
Aside from Instagram, also some physical art galleries have an online presence. A very interesting platform enabling this is Artland — a digital platform allowing to browse online 3D exhibitions, make online visits to selected art galleries, and also facilitating the subsequent sale of artworks. In respect of the latter, Artland, like other online marketplaces, explicitly provides that it is not a party to a potential sale. In their Terms and Conditions they state: “When buying products on the Artland Platform, the contract for the sale is directly between the Seller (Galleries/consulting) and the Purchaser. While Artland may provide pricing, shipping, listing, and other guidance as part of our services, such guidance is solely informational and indicative, and you may decide to follow it or not” (https://www.artland.com/tos).
All of the examples mentioned in this article are different venues for the potential buyers to first and foremost, get acquainted with the works of art, the artists and/or their galleries. Some of them provide a possibility to immediately proceed with the purchase, make an offer or place a sales inquiry, yet all of them are mere facilitators to the sale and not the representatives of either of the parties to the subsequent deal, nor the party to such a deal themselves. In the next article, I would like to elaborate on the online auctions, which, in one of its forms could be a substantially different set up for art sales.