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 n Bottle of Tylenol n What we used to think about E-commerce n What we should think now about E- commerce n Conclusion

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

Tylenol and E-Commerce n Youve heard of shrinkwrap and clickwrap n Meet trustwrap n What sorts of trustwrap will work for E-commerce

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

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

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

The end of intermediaries? n eBay n The initial dream of community and feedback as sufficient

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

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

Conclusion (cont.) n Competition in trustwrap – Infomediaries havent succeeded n 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

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

Contact Information n Professor Peter Swire n Phone: (301) n n Web: n Presidential Privacy Archives: