Open Systems, Free Markets, and Regulation of Internet Commerce

Can commercial transactions conducted over the Internet be regulated by existing commercial law doctrines? Many promoters of Internet commerce argue that business done over open computer networks such as the Internet will require a new regulatory framework In fact, many issues raised by Internet commerce have already been considered at length in the context of electronic commerce conducted over closed computer networks, such as those used in financial markets. One of the most hotly debated issues regarding the regulation of Internet commerce is the question of what would be the online equivalent of a signature. Some have argued that, because new technology using public key cryptography is uniquely suited to resolving this issue, public key cryptography should be promoted with special legislation. These claims for preferential treatment should be viewed with skepticism, however, when they are advanced by those marketing the technology before there have been any large-scale adoptions of the technology in question. The desirability of technology-specific legislation should be especially suspect if it comes at the expense of consumer protection provisions found in the regulation of equivalent electronic financial services such as credit cards or electronic funds transfers. A technology-neutral approach to Internet commerce legislation will permit parties to commercial transactions to make up their own minds about what new business practices make sense for Internet commerce. If any special legislation is needed to promote sound business practices in Internet commerce at this early stage in its development, it would be technology-neutral consumer protection legislation, not protections for technology developers and promoters before the risks associated with their products have become apparent