Protecting the Digital Consumer: The Limits of Cyberspace Utopianism
106 Pages Posted: 14 Nov 1998
Within the next few years, business-to-consumer electronic commerce will amount to tens of billions of dollars a year. Inevitably, a significant portion of that turnover will consist of transactions in which dishonest sellers attempt to defraud consumers by the use of deceptive marketing practices. An issue of growing importance is whether, and to what extent, the existing consumer protection regulatory regime may appropriately be applied to electronic commerce. This article rebuts the utopian thesis that government regulation of the Internet is neither necessary nor desirable, arguing, to the contrary, that governments retain their traditional regulatory role with respect to consumer transactions regardless of the means of communication used in carrying out such transactions. Certain novel characteristics of the online medium, however, make it impossible, or at least inadvisable, to apply the existing consumer protection regulatory regime to online transactions without making certain adjustments. Furthermore, co-regulation, consisting of coordinated efforts by governments and the private sector, should play a prominent role in controlling online deceptive marketing practices. The article concludes with a proposed set of guidelines for governments and the private sector to follow in their efforts to control online fraud.
JEL Classification: L50
Suggested Citation: Suggested Citation