Academic journal article The European Journal of Comparative Economics

Auctioneers vs. Commissaires-Priseurs: The Carnival Mirror of Profession Regulation in the International Art Market

Academic journal article The European Journal of Comparative Economics

Auctioneers vs. Commissaires-Priseurs: The Carnival Mirror of Profession Regulation in the International Art Market

Article excerpt

Abstract

This paper is a comparative analysis of the recent evolution of the French and the Anglo-Saxon profession regulations of auctioneers in terms of entry barriers and exercise of the profession. Firstly, following Stephen and Love's (1999) framework of the regulation of legal profession, we highlight the differences between regulations focussing on different levels (entry restrictions, advertising, fees, fee contracts, and organisational form). We show that French commissaire-priseurs and Anglo-Saxon auctioneers are bounded to quite opposed rules, relating to both the level of regulation (licensing against registration or certification) and the scope of this regulation. Secondly, we try to assess the success of these regulations in terms of economic efficiency by comparing the international markets shares of French and Anglo-Saxon auctioneers. We further highlight how a weak regulation can disturb prices mechanisms and, in some cases, favour speculation. The discussion of some emblematic scandals highlights distortions provoked by a strong, as well as a weak regulation.

JEL: J44, L43, Z11, D44

Keywords: Art market; Profession regulation; Auctioneers; Cross-country analysis.

1. Introduction

In the early 1960s the overall turnover of the French auctioneer Etienne Ader was twice as much that of Christie's and Sotheby's combined worldwide. Nowadays, the turnover of French auctioneers altogether is less than one half of Christie's or Sotheby's alone. In 2010 the total annual revenue from the sale of art and collectibles was, including fees, euro3,366 millions for Christie's, and euro3,308 millions for Sotheby's. For the 345 French auction houses it summed up to euro1,528 millions, where the turnover of the first French house was euro102 millions.

Could the 1556 royal edict on French auctioneers' status have some responsibility for such a decline. In 1556, a royal edict by King Henry II had established in each town "formal and permanent offices for chattelS official appraiser, so that they could manage the valuation, the appraisal, the sales and the dispersal of chattels, to stop abuses, fraud, malpractices and other embezzlement" (Quemin 1997: 28). This monopoly went on more than four hundred years. During this period, French auctioneers have^ been subject to an array of censorious rules and regulations, while their main competitors in Great Britain and, later, in the United States, seem to have benefited of a relatively minimal and liberal system. This paper aims to analyse these differences, and to discuss whether, as a possible outcome of them, during the 1970s French auctioneers have been sheltered from competition to the advantage of their Anglo-Saxon counterparts. In addition, our analysis contributes to shed light on the growing rivalry between Christie's and Sotheby's on an internationalised art market, and their leadership based on expanded activities, new business practices, management, and contractual rules.

The recent reform of the French auction market has introduced some liberalisation and put the public-officer status of French auctioneers (commissaires- priseurs) more in line with that of their Anglo-Saxon private counterparts. Such a reform took place in two steps. First, a 2000 decree, implemented in 2001, suppressed the monopoly of commissaires-priseurs on volunteer sales at public auctions.3 Fees were partially liberalised, and rules of conduct were loosened. In this new legal framework, auctioneers have been allowed to adopt a wider range of market strategies and to choose more freely the formal organisation of their business. The law also set up a new institutional body, the Council of Voluntary Sales (Conseil des ventes volontaires), to control the behaviour of auctioneers and auction houses. Second, on July 6th, 2011 the French parliament approved a draft bill, which transposed the European Directive on Services and established the principle of free practice of public auctions. …

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