Consumers in rich countries have grown used to the idea that the government takes responsibility for everything from the stability of the banks to the safety of the drugs or their rights to refund when goods are faulty. But governments cannot enforce national laws on businesses whose only presence is on the screen. Even in a country where a clear right to compensation exists, the on-line customer in Tokyo, says, can hardly go to New York to get a refund for a clothes purchase.
One answer is for government to cooperate more: to recognize each other’s rules. But that requires years of work and volumes of detailed rules. And plenty of countries have rules too fanciful for sober countries to accept. There is ,however, another choice. Let the electronic businesses do the regulation themselves. They do, after all, have a self-interest in doing so.
In electronic commerce, a reputation for honest dealing will be a valuable competitive asset. Governments ,too, may compete to be trusted. For instance, customers ordering medicines on-line may prefer to buy from the united states because they trust the rigorous screening of the Food and Drug Administration; or they may decide that the FDA’s rules are too strict, and buy from Switzerland instead.
Customers will still need to use their judgment. But precisely because the technology is new ,electronic shoppers are likely for a while to be a lot more cautious than customers of the normal sort. And the new technology will also make it easier for them to complain when a company lets them down. In this way,at least, the cyberspace may argue for fewer consumer protection laws, not more.
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