FTC Worried About Barriers to E-Commerce

The Federal Trade Commission, concerned that some state regulations and
private business practices may be having “significant” anti-competitive
effects on e-commerce, is planning a three-day workshop on the matter.

FTC Chairman Timothy J. Muris said at a news conference in Washington that
“there are many state regulations adopted ostensibly for one purpose that had
the effect of protecting existing businesses from Internet competition.”

“The purpose of the workshop is to give us an increased understanding of the
issues,” he said.

The FTC said that for example, some states prohibit
online sales of certain products or require that e-businesses maintain a
physical office in their state.

The FTC said that some estimates suggest that the potential costs to
consumers of these anti-competitive restrictions “may exceed $15 billion

Industries in which significant restrictions on Internet commerce have been
alleged, according to the FTC, include retailing, auto sales, real estate and
mortgages, health care, pharmaceuticals, telemedicine, the sale of wine,
auction services, the sale of contact lenses and the sale of caskets.

One specific topic will be “whether auto manufacturers been forced to limit
Internet sales of automobiles, and if so how?”

“I’d be surprised if we don’t have additional investigations,” Muris said.
“We think the workshops will facilitate further work on our part … it’s an
important topic.”

On the private business side, the FTC said that some private companies “have
engaged in conduct that may raise antitrust issues … For instance, some
dealers do not list prices for certain items they sell online; others refrain
from selling certain items in their product line over the Internet at all,
and urge competitors to follow suit.”

“The willingness of businesses to use the government to restrict competition
remains at a high level,” Muris said. “Reducing the barriers to e-commerce
could dramatically increase competition and benefit consumers.”

“E-commerce has tremendous potential, especially if anti-competitive barriers
to dynamic new forms of Internet competition can be understood and
eliminated,” said Ted Cruz, the FTC’s director of policy planning.

The workshop will take place Oct. 8-10 at FTC headquarters.

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