of the Internet
Bruce H. Kobayashi and Larry E. Ribstein
Electronic commerce provides both opportunities and challenges for markets. Reduced transaction costs and more rapid dissemination of information offer the potential for more efficient consumer markets. At the same time, however, new markets and technologies can create perceived regulatory gaps and apparent opportunities for new regulation. One example is venders' use of consumer marketing information that they obtain on the Internet. The Federal Trade Commission has recommended regulating privacy, 1 and Congress has legislated practices for using personal information collected from consumers. 2 Another is the debate concerning regulation of the licensing of software and other computer information, particularly in transactions over the Internet. The National Conference of Commissioners for Uniform State Laws (NCCUSL) has promulgated the Uniform Computer Information Transactions Act (UCITA). 3 The FTC has considered the possibility of federally regulating such transactions. 4
Some commentators dispute the notion that new legislation is required, 5 and have noted the potential costs of such regulation. 6 This chapter focuses on the more fundamental question of who should make such regulatory decisions. The chapter mainly concerns the issues specifically relating to federal and state regulation within the United States. We also discuss broader questions concerning regulation by nations in the international setting.
In contrast to the substantial disagreement over the substantive provisions of new legislation regulating electronic commerce, there is widespread agreement that such regulatory decisions should be made at the federal level. 7 Those favoring new substantive regulation of electronic commerce argue that states are not the appropriate regulators because new contracting technologies and the global