As you can tell from all the noise, there’s a party happening on the Internet. Users and consumers are whooping it up over all the innovations, information, and choices available at new online services. In addition to millions of job driven by e-commerce, consumers are able to do more, from any location, faster than ever before.
But all this partying has got some neighbors on the block grumbling. Traditional businesses that are comfortable with byzantine laws that protect the status quo are increasingly flexing their muscle to keep new entrants out of the market.
Our March 2012 iAWFUL list finds that, instead of encouraging innovation, many market incumbents are using legacy laws created before the Internet’s arrival to slow down and eliminate innovation and competition. This practice is the top threat to online commerce this year.
Start-ups like Uber, Airbnb, and TrueCar – websites that connect consumers directly to service providers — are being stymied by long-standing taxi commission rules, hotel regulations, and dealer franchise laws.
The good news is that in many cases laws don’t need to be changed to protect innovative business models and online consumers. NetChoice is urging local, state, and federal regulators just to send a clear message that these laws should not be misused to block consumer-empowering Internet tools.
Coming in at number two on this year’s iAWFUL list is an effort being pursued in Congress and in a handful of state legislatures, to impose heavy-handed rules on Internet and mobile applications that use geo-location technology. The law would require users to click through a pop-up every time they used a location-enabled app – even if the app in question is specifically advertised as a location tool (such as Foursquare).
Even more disturbing are state proposals to outlaw the practice of granting adults special offers, benefits or coupons for providing their location to apps. While getting the privacy question right is beneficial for both developers and consumers, the precedent of state legislators specifically mandating feature sets for new online products is a chilling thought.
Rounding out the “top” three on the list is the ongoing federal effort to force online retailers to collect sales taxes for nearly 10,000 jurisdictions, regardless of whether they have physical presence in a state. Despite pleas from small businesses, which stand to lose the most from these efforts, the bills in the House and Senate provide little meaningful relief for small sellers. To make things even more awful, these new federal laws would give rule-making powers to a cartel of unelected tax administrators.
Rather than try to work with small e-commerce sellers, the advocates of so-called “streamlined” sales tax — backed by big box retail chains – are pushing for the most aggressive (and regressive) version of the bill.
From legacy laws threatening innovative products to legislators trying their own hand at app development, the 2012 iAWFUL list outlines a hefty work list for the year ahead.
The entire iAWFUL list is here. It details all the ways that varied interests are trying to shut down the online party. NetChoice will do its part to keep the music cranked up.