FTC TO OPEN E-COMMERCE INQUIRY

Says States and Retailers May Be Blocking Online Merchants

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WASHINGTON (AdAge.com) -- The Federal Trade Commission today said it will look into possible anticompetitive efforts by retailers and states to limit e-commerce.

The FTC, saying that "the potential costs to consumers of these ... restrictions may exceed $15 billion annually," will hold a three-day hearing Oct. 8-10 to discuss some of the issues and seek comments from marketers.

'Anticompetitive barriers'
Ted Cruz, the FTC's director

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of policy planning, said, "E-commerce has tremendous potential, especially if anticompetitive barriers to dynamic new forms of Internet competition can be understood and eliminated."

Practices the FTC is concerned about are those in which brick-and-mortar merchants don't list prices for certain items they sell online, refrain from selling certain items over the Internet and urge competitors to follow suit.

The FTC also said some states prohibit online sales of certain products such as car sales, real estate sales, mortgages, health care, drug sales, wine, contacts lenses and caskets.

D.C. lobbyists
The FTC risks setting off a firestorm with some of the most powerful lobbying groups in Washington -- car dealers and real estate brokers -- as well as with states, which could lose considerable tax dollars if sales shift from stores to the Web.

The FTC, however, said it was trying to develop information on the best public policy to pursue.

"All of these restrictions may contribute to sound public policy, or they may constitute attempts by existing industries to forestall the entry of Internet competitors and impede new forms of competition," the FTC said.

"Robust competition is vital to our economy, and reducing the barriers to e-commerce dramatically could increase competition and benefit consumers," FTC Chairman Timothy Muris said.

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