ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Wednesday, December 28, 2005

Regulating E-Commerce

Larry_ribstein_and_bruce_kobayashi The conventional thinking about electronic commerce is that it's impossible for individual U.S. states to regulate it efficiently, and that a federal system (or some sort of uniform law) is needed.

Well, Larry Ribstein (Illinois) and Bruce Kobayashi (Geo. Mason) are not exactly conventional thinkers.  Here's a blast from the past, their Emory Law Journal piece, State Regulation of Electronic Commerce.  Here's the abstract:

There is a widespread belief that regulation of electronic commerce by individual states is unworkable because firms doing global business on the Internet easily can evade state regulation or, conversely, because firms are subject to excessive regulation due to states' overlapping jurisdiction. Instead, it is believed that electronic commerce is best regulated at the federal or even global level, and that any state regulation should be pursuant to uniform laws. This article challenges this conventional wisdom. It shows that regulation of electronic commerce by individual states has several advantages over federal or uniform state laws and that the problems of state regulation have been exaggerated.

First, state regulation provides variety, evolution and competition that is especially well suited to the dynamic nature of electronic commerce. Second, courts can minimize jurisdictional overlaps by enforcing choice-of-law and choice-of-forum contracts. Third, markets alleviate concerns that enforcing contractual choice would lead to a race-to-the-bottom in state Internet regulation. Any remaining problems with state regulation should be analyzed in comparison with those that would result under federal or uniform state law.

[Frank Snyder]

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