/ New Rules in the New York Art Market

Tuesday, May 10, 2022
08:18 am CET
By Ronny Waburek

New Rules

New York Makes the Art Market More Opaque

Tuesday, May 10, 2022, 08:18 am CET
By Ronny Waburek

New rules in the New York art market

New rules in the New York art market

The rules for art trading are changing, at least in the epicenter of the art market, New York. Shortly before the season's most important auctions, New York's auction houses were caught off guard by the city government. To improve the business climate after more than two years of pandemic, consumer protection rules have been relaxed and economic regulations abolished.

What is now happening in reality is not in line with the original goal of these changes. Because this law was supposed to help small businesses like laundromats and coffee shops. But now the law has been changed and it will also help large businesses in the art trade.

There are some new changes for the art market: For example, auctioneers will no longer have to disclose whether they have financial interests in works for sale. After deregulation, they would now even be allowed to announce fictitious bids to drive up the auction or to drive up the price above the minimum price with so-called "chandelier bids." And auctioneers will soon not even need a license. It remains questionable whether these changes will really benefit the art market or harm it - in the long run.

After all, the rules that previously applied to the art market had an important function. Many of the rules had been set up by the city of New York 30 years ago specifically to tame what was considered an opaque art market. The relaxations are now benefiting the major autkions houses. The major international houses said that despite the changes, they intend to continue to "operate fairly" (Sotheby's), adhere to "the highest ethical standards" (Christie's), and "conduct auctions transparently and in the best interests of clients" (Phillips)-as if the previous rules were still in effect. After all, the relative transparency of the auction market has also benefited the industry's grandees in recent boom years.

Basically, it's all about trust, which is important for both consignors and bidders. In short, trust is the basis of the business with art. A business that could flush a good billion dollars into the auction houses' coffers in the coming week. After all, the range of works on offer at the "New York Sales" in the coming weeks is high-caliber. Some consignors have probably been waiting for the pandemic to subside in order to throw their most promising pieces onto the market. And the high estimates suggest that auction houses are assured of strong demand. But the new rules make it difficult to inspire confidence. Quite a few in the art market are looking at the changes with skepticism.

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Ronny Waburek
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