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“Why E-Commerce is Like a Bottle of Tylenol”

“Why E-Commerce is Like a Bottle of Tylenol”. Professor Peter P. Swire Ohio State Law School Conference on New Technologies and International Governance February 11, 2002. Overview. Bottle of Tylenol What we used to think about E-commerce What we should think now about E-commerce

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“Why E-Commerce is Like a Bottle of Tylenol”

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  1. “Why E-Commerce is Like a Bottle of Tylenol” Professor Peter P. Swire Ohio State Law School Conference on New Technologies and International Governance February 11, 2002

  2. Overview • Bottle of Tylenol • What we used to think about E-commerce • What we should think now about E-commerce • Conclusion

  3. I. Bottle of Tylenol • The 1980s and poison episode • Johnson & Johnson response • Remove from shelves • Build trust into every transaction

  4. Tylenol and E-Commerce • You’ve heard of “shrinkwrap” and “clickwrap” • Meet “trustwrap” • What sorts of trustwrap will work for E-commerce

  5. II. What we used to know about . E-Commerce • Online e-cash • Pure Internet plays • Unmediated matching of buyers and sellers • This worked! • “Left handed corkscrews”

  6. III. What we should know now . about E-commerce • Credit cards beat e-cash • $50 rule • Dispute resolution built in • Our first example of trustwrap

  7. Pure Internet plays? • Rise of the “clicks and bricks” • Brands, solidity, and trust • Trade-ins, complaints, customer service • All the same day • Or, can use the Net as with a pure play • Jurisdiction and choice of law favor consumers • Hard to deny local consumer protection laws if have a large store there

  8. The end of intermediaries? • eBay • The initial dream of community and feedback as sufficient

  9. eBay as Shadow Legal System • Buyer protection against non-delivery • Seller protection against non-payment • Seller protection against outages • Rules for limiting free speech (feedback) • Anti-shill rules • Dispute resolution • Criminal enforcement against fraud • Lots more

  10. IV. Conclusion • Johnson & Johnson created trustwrap • Tylenol priced much higher than generic • Trustwrap has helped online survival amidst the dot-bombs • Credit cards • Clicks and bricks • eBay

  11. Conclusion (cont.) • Competition in trustwrap • “Infomediaries” haven’t succeeded • The trustwrap that is winning in the marketplace has important legal guarantees to consumer • Credit card rules • Jurisdiction and consumer protection rules • All the eBay rules

  12. Conclusion • What we used to know about E-commerce • What we should know now about E-commerce • Bigger role for legal guarantees than many once thought

  13. Contact Information • Professor Peter Swire • Phone: (301) 213-9587 • Email: pswire@law.gwu.edu • Web: www.osu.edu/units/law/swire.htm • Presidential Privacy Archives: www.privacy2000.org

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