Can one desire too much of a good thing? Yes – especially if it is mandated by government regulation instead of actual consumer preference.
Electronic commerce is rapidly becoming a large part of our economy, as evidenced by this past holiday shopping season. Online retailers sold $8.8 billion worth of goods and services, a 24 percent increase as compared to the same period in 2003. Yet as E-commerce heats up, so too is E-legislation, often in the form of “consumer protection” statutes.
Government regulation of E-commerce falls into two major categories: (1) laws that explicitly target online activity, and (2) facially neutral laws that have a direct bias against web-based services.
Everyone a Presumed Felon – Online Dating Safety Warnings
WARNING: WE HAVE NOT CONDUCTED FELONY CONVICTION SEARCHES OR FBI SEARCHES ON OUR COMMUNICATING MEMBERS
Earlier this month
Advertisements for meeting people used to be relegated to the back pages of local news or tabloid publications. The Internet has allowed for an explosion of value-added services to the static black and white print “male seeks female” classified ad. Some online dating sites are just the web equivalent of newspaper ads, but they provide more information and photos and allow a user to search based on age, gender, and location. More significantly, many of these sites take a more active role. Sites such as eHarmony offer a relationship questionnaire to create a personality profile. Yahoo provides a relationship test with its premiere service that offers personality and relationship compatibility information. These services help match people based on interests and background and provide a targeted way for people to meet friends and love interests.
What will a law do that the market can’t already provide? The proposed bills are truly a feel-good law in search of a problem. If security-conscious consumers want to use a service that provides background checks, there are those that do. You can even perform one yourself here, and if you’re involved with little league baseball, there’s a dedicated site for rap sheets on coaches.
Biased Laws Against Online Real Estate Listings
Some old laws simply do not fit when applied to new business models. A good example of this is playing out in the state of
The licensing law is a 1975 statute originally enacted to prevent consumer fraud. Laudable intentions aside, the law’s requirements—hard copy contracts and escrow agreements, submissions of available listings from landlords in writing before distribution, mandatory refunds on request, and a ban on advertising of specific properties—are incompatible with the 24/7 convenience, consumer control, and lower costs of online, subscription-based information services.
Real estate Internet portals can easily connect all the players to a real estate transaction—buyers, sellers, renters, landlords, and brokers. MLX.com empowers renters and buyers to find matched listings that are accessible via the web and instant email services. In its efforts to force a square peg into a round hole, the New York Department of State is trying to shut down the online service.
Laws have the unfortunate tendency to outlive their usefulness and removing outdated laws is a trying process. This was the case in
Rethinking Consumer Protection in an Internet Era
Laws that directly target E-commerce are for the most part unnecessary. Current laws can and do exist to punish acts of fraud and other criminal activity. While internet communications have created new ways to defraud consumer, it has also empowered consumers with information in ways that did not exist in the offline world.
Online companies provide new ways of packaging and disseminating information that responds to consumer’s needs. We don’t need government regulation to mandate which services a website must provide. Instead, regulators should reexamine their rules to make sure that online sites can flourish without prejudice. Directly or indirectly, legislative extremism in the “protection” of consumers can end up doing more harm than good.
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