Under the bill, recently presented to both the Senate and Congress, sham or chandelier bids against the reserve would be prohibited, unless the bids are identified with the phrase “for the consignor”.
Supporters argue that chandelier bids undermine confidence in the art market by creating an atmosphere of interest in offered work that may not actually exist. They believe the theatrical benefits created by what is a common practice are far outweighed by the public’s right to be fully informed during the auction process.
However Sotheby’s consider the bill “unnecessary” and claim in a prepared legal statement that it would regulate auction houses “in a manner that would almost certainly result in sellers electing to have their artworks and other items sold at auction in London, Paris, or other locations outside the United States”.
“This legislation appears to be based upon the erroneous theory that buyers at auction houses like Sotheby’s are not aware of the fully disclosed bidding practices that are utilised. In actuality, disclosure statements in auction house catalogues and other information plainly inform auction participants of the bidding methods. This includes notice of the existence of reserve bidding and guaranteed prices, when such methods are utilised.”
“The bill would, in effect, require the auction house to disclose the seller’s minimum price for the property being auctioned. If all prospective buyers know the seller’s minimum price in advance, there would not be any incentive for bidders to enter an opening bid in the hope that the property will not be sold at auction.”
Sotheby’s oppose outlawing the chandelier bid in New York
Sotheby’s are strongly opposing proposed legislation in New York that aims to outlaw the ‘chandelier’ bid.
