Tech Bytes – Tid Bits in tech News: A Letter to The Wall Street Journal

August 31, 2000

To the Editor:

Your August 31st editorial, “Tire-Kicking on the Web,” correctly questions District Court Judge Sam Spark’s judgment in the Texas case involving online car sales. His decision mocks the commerce clause and harms consumers. However, the editorial missed a more interesting question. Can this type of protectionism survive in a wired economy?

The decision was anachronistic, myopic, and protectionist – agreed. But the Internet has reduced the costs of information so drastically that the middlemen’s historic advantage has been erased. Try as they might to erect legal barriers to protect their rents, middlemen and complicit regulators will soon encounter a tidal wave of public discontent.

From stock purchases to a new pair of stockings, the American consumer is interested in, and willing to seek out, a better deal. We’re interested in saving a buck and won’t let politicians or entrenched interests stand in our way.

A consumer who is prevented from purchasing an automobile online is demonstrably harmed. The typical aversion to the auto showroom experience coupled with an increased disposition to purchase online will no doubt topple the legal Wall of Jericho separating consumers from savings. The Internet is able to squeeze out middlemen. We might expect the online purchase of wines, microbrews, and other products currently protected by government monopolies will soon follow.

The courts alone cannot save these conventions. Middlemen must find innovative ways to add value to the consumer experience. While tens of thousands of miles of network infrastructure is not going away, those who fail to adapt to it just might.

Jason M. Thomas

Technology and Communications Policy Analyst

Citizens for a Sound Economy