For any kind of market to grow, develop and sustain a healthy and fair relationship between the buyers and sellers, transparency is a crucial element. Granted, some markets are, and must be, 100% transparent, while others can allow a less clear view of its flow. Traditionally, the art market is somewhat of a murky field; transactions, regulations and varying laws, especially at the top end of the market, have proven to be opaque far too many times. And yet, it keeps on going. Some of the world’s most expensive items exchange owners through the art market, millions upon millions go through it on a regular basis, and still, the art market is often considered as one of the least regulated markets in the world. So, how transparent is the art market, and should it be more regulated at all?
What does transparency even represent in the art market? Essentially, it is an umbrella term that covers a wide array of topics; clarity of pricing, terms and conditions, consumer rights in buying/selling, finance, provenance, market manipulation, origin of the artwork, certificates of authenticity, and many others. Money laundering, looting of antiquities, distribution of fakes and forgeries are also a major issue in the art market, authorities and officials keep trying to mitigate these problems, but they are always casting a shadow over the transparency of the art market. With already hundreds of laws aimed to regulate the art market, and they usually vary from one country to the other, it seems like everything should be in order, but it obviously is not. Flaws in the laws, holes in the system, and grey areas are causing severe scandals in the world of art, such as the Cols Rouges criminal network that operated out of the Hôtel Drouot. In addition, with rogue funds, auction houses manipulating the market and causing bubbles, it’s all adding fuel to the fire whose smoke blurs the much needed transparency.
On another side of this conundrum lies the public interest and the right to privacy, which can directly clash or at least overlap with the debates of transparency. Building up trust and establishing clarity requires openness of all parties involved, no withholding of information or giving out vague, undetermined details, and this obviously isn’t always in interest of some parties. Even if it was regulated by laws and rulings, sooner or later, it would run into other legal barriers or would breach rights to privacy, such is the case of the proposal to implement object passports listing all previous owners of the item in question, which proved to be an impediment on Article 8 of the European Convention on Human Rights.
All is not gloomy when it comes to art market transparency. As high as all the obstacles seem, there is a beacon of light which shines on the subject. A variety of services dedicated to improving the transparency in the art market are rising and tackling the issues. Art price databases, precise auction results, regular reports from different trustworthy sources, reviews, predictions and advice are available to everyone wishing to explore the art market. The Internet, social networks and globalization are contributing to bringing clarity and definition to the sphere. The information asymmetry is lessening as the market develops and includes more sustainable sources of precise knowledge and credibility. It is obvious the art market will never have complete transparency, nor is it necessary perhaps, but the conditions are changing, slowly, but surely.