Text Version | En Español | Newsletter Signup | Home
Click here to view the At Work in Congress Section Click here to view the MA Resources Click here to view How John Kerry Can Help You Click here to view the About John Kerry Click here to view the John Kerry Working for MA Click here to view the John Kerry Newsroom Click here to Contact John Kerry
  Newsroom  
Press Releases
Floor Statements
Speeches
Op-Eds
Multimedia
Photo Gallery
Media Outlets

Search Site:
Newsroom
03/01/2001

Left In The Buggy: E-Commerce Is Seen As Threat To Slow Middlemen


Investors Business Daily By John F.Kerry and Robert Atkinson

In the 1920's the Horse and Mule Association of America vigorously campaigned to limit the use of trucks on public roads, and successfully waged a nationwide campaign to prohibit automobile parking on principal streets.

Eighty years later, in spite of history's lesson that progress can be slowed but never stopped by heavy-handed political tactics, some still try. Futile efforts to stymy technology have not gone the way of the horse and buggy; retailers, distributors, brokers, and other middlemen threatened by ecommerce are digging in their heels and fighting back against today's New Economy.

In North Carolina and 29 other states, when consumers can't find a bottle of wine on the shelf of their local store, wine wholesalers have guaranteed they can't buy it online either -- they've simply made it illegal. Consumers who want to go online to customize a new car for purchase also get a rude awakening: due to lobbying by car dealers, they're out of luck in all 50 states. In Maine, optometrists lobbied for a prohibition against releasing prescriptions to their patients -- ensuring that consumers can not reorder contact lenses online. In New Hampshire, the state Board of Auctioneers ruled that citizens can't use Ebay to auction off items that are not their own, without being a licensed auctioneer. The repercussions for violating that law? Felony charges punishable by time in prison.

With the Internet, consumers are no longer limited in where they shop, when they shop, or with whom they do business. Competition is driving down prices, encouraging efficiency, and offering buyers and sellers more market choices. Consumers should have legitimate protections in the New Economy – indeed they should be as safe from fraud, crime, unfair monopolies, and threats to public health and safety in the online universe as they are in the offline world. Nonetheless, middlemen whose personal economic agenda is being threatened by technology should not pull every judicial, regulatory, and legislative lever in the system merely to thwart competitors intent on using the Internet to sell products or services. But that's precisely what's happening – and the pace of resistance will only accelerate as more industries fight in more states, Congress, and the courts for protectionist legislation and regulations.

Siding with the innovators against the status quo can be politically difficult. Entrenched opponents often have more political power than new entrants and innovators, and the stakes are high: opposition by middlemen represents perhaps the biggest threat to the rapid digitization of the U.S. economy. The Progressive Policy Institute estimates that consumers pay at least $15 billion more every year for goods and services as a result of e-commerce protectionism.

Specific steps are needed to ensure that consumers are the beneficiaries of the technological boom and the New Economy is not undone by a patchwork of irrational barriers.

The new Administration would be wise to empower an e-commerce ombudsman to serve as an advocate and adviser for e-commerce competition. The Federal Trade Commission and the Department of Justice should increase their efforts to prevent retailers and other businesses from colluding against companies attempting to sell directly to consumers. Many manufacturers have been slow to sell their products over the Web, particularly at a lower price, in fear of retaliation from the retailers they depend on for sales of their products. The Federal Trade Commission and the Department of Justice should enforce antitrust laws both offline and online anytime there is evidence of collusion, price fixing, or anti-competitive activity that hurts consumers; laws should not be applied unevenly to favor the old economy over the emerging new one. Retailer retaliation must be precluded by smart and thoughtful public policy. As commerce is increasingly conducted electronically across state, and even national, borders, it's time to rethink the old system of state-by-state business and professional licensing. The 1999 Financial Services Modernization Act used this model to give states four years to have a uniform licensing requirement or reciprocity for the insurance industry. We must insist that this process move forward smoothly.

Long before the Information Age, entrenched interests lobbied government to put their narrow agenda ahead of the common good. Teddy Roosevelt battled anti-competitive monopolies. John Kennedy challenged soaring steel prices. Middlemen are not inherently the enemy; many are understandably frightened into defensive tactics. In fact, middlemen will not all disappear, nor should they as many provide special services customers want and will have their own competitive advantage. But the best interests of consumers and the potential for the New Economy to raise our quality of life should determine how commerce is structured, not special interests distorting the political process. Policymakers should resist the lobbying onslaught and ensure that e-commerce competitors are allowed to compete unburdened by unfair and discriminatory rules, regulations, and laws. John F. Kerry is a Democratic U.S. Senator from Massachusetts. Robert Atkinson is director of the Technology and New Economy Project at Progressive Policy Institute.



Offices Locations
Washington D.C.
304 Russell Bldg.
Third Floor
Washington D.C. 20510
(202) 224-2742
Boston
One Bowdoin Square
Tenth Floor
Boston, MA 02114
(617) 565-8519
Springfield
Springfield Federal Building
1550 Main Street
Suite 304
Springfield, MA 01101
(413) 785-4610
Fall River
222 Milliken Place
Suite 312
Fall River, Ma 02721
(508) 677-0522