Interesting People mailing list archives
IP: Let the marketplace dictate rules, says White House
From: Dave Farber <farber () cis upenn edu>
Date: Thu, 13 Mar 1997 15:55:13 -0500
In no rush to regulate the Net Let the marketplace dictate rules, says White House adviser Magaziner BY RORY J. O'CONNOR Mercury News Washington Bureau BURLINGAME -- Vexing issues ranging from privacy rights to codes of commercial conduct and taxation confront the emerging cyberspace marketplace -- and the marketplace itself should develop most of the rules, according to Ira C. Magaziner, President Clinton's senior adviser for policy development. The go-slow approach to regulation, which Magaziner discussed Wednesday in a speech at the annual Computers Freedom and Privacy conference, is at the heart of the Internet policy Clinton will endorse, perhaps as soon as next month. While that approach is favored by most of the Internet industry, it may face opposition among some consumer groups, privacy advocates and members of Congress, where several efforts are already under way to regulate some parts of the Net. The policy is based on a white paper written by Magaziner late last year, and since revised based on a flood of comments to the White House from Internet users and businesses. Among the paper's most significant provisions: Electronic commerce should not be taxed; industry should develop a ``uniform commercial code'' for cyberspace; the government shouldn't attempt to regulate Internet content, instead relying on ratings systems and screening technology; and industry should also develop a self-regulating regime to address consumer concerns about the privacy of the information collected about them online. ``We do this quite humbly, because I think there is more risk the government will do something wrong, rather than fail to do something it should,'' Magaziner said. ``So we have to approach the Internet and electronic commerce very carefully.'' Many of the areas addressed in the new policy are controversial and could have a significant impact on both users and the U.S. economy. Taxing electronic commerce, for example, has been proposed in several states where budgets are tight, as an attractive alternative to raising other taxes or cutting government services. But Magaziner called Internet taxes a poor idea, both because of the unwieldy bureaucracy they would entail and of the potential to stifle growth in the new medium. The government would do better to let the market grow, he said, and get its share of the revenues through the existing corporate tax structure on profits. The government also is under some pressure to protect consumer privacy in online transactions. Companies that offer goods and services for sale via the Internet have the ability to mine a rich vein of data about anyone who visits their virtual store, far more than a merchant with a physical storefront. ``The things we are able to use and collect online are really fantastic,'' said Jason Olin, president of CD-Now, an online purveyor of music. Privacy advocates and many consumers have urged the online industry to severely restrict data-gathering activities. They have asked companies to get explicit permission from consumers before collecting any information at all, and in some cases have demanded that companies pay consumers if they market any information about them to others. While the administration believes privacy issues are serious, it is unlikely to step in soon with such controls. ``This is an issue where we want to avoid a regulatory approach, and encourage industry to step forward'' to develop its own standards and codes of behavior, Magaziner said. That is the approach favored by the Federal Trade Commission, which plans a second-annual public hearing on the topic in June, said Commissioner Christine Varney. But she warned industry to be ready to demonstrate progress by then, or face the possibility that regulators or Congress would take a much more active role. ``I believe, in general, government should regulate only when there's been a demonstrable marketplace failure,'' she said, noting that only ``four or five'' proposed industry guidelines have been forwarded to the FTC, when the number ``should be 40 or 50.'' The industry must also come up with comprehensive rules for such things as creating contracts and resolving business disputes in online commerce, by developing an online version of the Uniform Commercial Code, Magaziner said. Such rules would need to be adopted worldwide because of the international nature of electronic commerce, he said. Some Internet legal experts said the idea had merit, but that it need not be adopted everywhere internationally. ``There's a misconception that there have to be the same (Internet) laws in all countries, or there'll be some e-commerce haven'' for fraud, said Carey Heckman, director of the Stanford Law and Policy Technology Center. ``Consumers can be educated to avoid the havens.'' Published Thursday, March 13, 1997, in the San Jose Mercury News
Current thread:
- IP: Let the marketplace dictate rules, says White House Dave Farber (Mar 13)