Global Networks and Local Values A Comparative Look at Germany and the United States (2001) / Chapter Skim
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7 The Impact of Global E-Commerce on Local Values
7 The Impact of Global E-Commerce on Local Values
Pages 170-189
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From page 170... ...
Indeed, there are at least three ways in which interactions between e-commerce and local or regional values might come about: · To the extent that e-commerce encourages new business models, changes the relationship between seller and buyer, and challenges existing regulatory structures, it has the potential to alter certain traditional commercial values. Those values are often locally, regionally, and nationally specific, so that the effect of e-commerce on commerce itself can also be local, regional, or national.
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From page 171... ...
The individual and group values and attitudes that are the subject of this report manifest themselves in the rich network of informal social institutions in which a market-oriented economic system is embedded. At the heart of these institutions is what might be called commercial values: personal motivation, the material dimensions of social status, and perhaps most important various aspects of trust.
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From page 172... ...
This governmental responsibility and concern for protecting the rights of the public is also evident in German attitudes and law concerning competitive practices. Germany places severe constraints on borderline marketing practices and exaggerated advertising claims, and competitors are quick to seek judicial relief when it appears that the line has been crossed.
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From page 173... ...
Second, by competing with local commercial systems and wresting market share from them, e-commerce can weaken their embedded values. 7.3 THE IMPACT OF E-COMMERCE ON LOCAL COMMERCIAL VALUES 7.3.1 The Globalization of Markets Because global networks reduce the distance-related transaction costs of certain kinds of business, they may clearly increase the magnitude of international commerce and change the cast of participants.
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From page 174... ...
Producers also spend a great deal on marketing, providing free information about the good, as well as samples or demonstration versions. Large firms in business-to-business transactions can use initial face-to-face meetings to establish the trust basis for an ongoing business relationship.
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From page 175... ...
These monopolists have a strong interest in locking customers into network relationships. Concepts like trust, reputation, loyalty, and commitment play a key role in the business strategies of online companies.5 We also find new strategies for price setting, from giving away products to complex schemes of price discrimination.6 Although it can be argued that competition remains intact because of a fierce contest for the maintenance and eventual replacement of such network monopolies the recent evidence 3Among the two leading contributions, Shapiro and Varian take a more conservative view, whereas Kelly foresees sweeping changes for fundamental concepts such as property and scarcity.
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From page 176... ...
That is the reason why patent and copyright statutes try to strike a tenuous balance between the temporary protection of exclusive property 7For a discussion of problems associated with a lack of excludability, see Bradford DeLong and Michael Froomkin, "Speculative Microeconomics for Tomorrow's Economy," 2000.
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From page 177... ...
On the other hand, the basic lack of transparency of information goods provides incentives to try out various schemes in order to reduce the likelihood of fraud or the delivery of inferior-quality products. 7.4 EFFECTS ON LOCAL COMMERCIAL VALUES To the extent that global networks lead to significant increases in ecommerce, some local business ventures will clearly be subjected to competitive pressures, particularly where the transactions involve tangible goods.
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From page 178... ...
The comments that follow here are therefore quite brief and intended only as a summary and to touch on some recent developments. Information and communications technologies raise issues in copyright law for several reasons.
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From page 179... ...
But again, if the protection comes through copyright, small reformations of the data would allow others to avoid copyright infringement. The problem is exacerbated in e-business because the same digital technologies that offer so many opportunities to create new information products and market them at very low marginal costs also make it extremely easy for others to copy those products.
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From page 180... ...
film industry, initially invoked provisions of international treaties in order to eliminate private copying, or fair use; these efforts were denounced as "copyright grab."~4 The issue is hardly settled, however, as the recent Napster controversy illustrates.~5 It has become clearer that illicit copying may not be as simple and inexpensive to monitor as originally thought; when such copying involves networks with several million users representing a considerable potential market for property such as music files copyright holders are aggressively seeking legal remedies. Thus, whether the solution ultimately lies in law or technical architecture remains to be seen.
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From page 181... ...
Congress has enacted the Digital Millennium Copyright Act (DMCA) ,~7 and the European Union promulgated Directive 2001/29/EC on the harmonization of certain aspects of copyright and related rights in the information society )
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From page 182... ...
As pointed out earlier in this chapter, there are considerable differences between the European Union and the United States regarding consumer protection and the role of contracts. Europeans are more severe in restraining false advertising claims than are Americans.
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From page 183... ...
The problem continues with the need to resolve differences in views about the appropriate role of government in enforcing or supplementing contracts to protect consumers, which would appear to make the issue more complicated than merely one of negotiating the proper application of commercial law. Furthermore, which nation's values should apply in determining what is appropriate advertising?
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From page 184... ...
For example, in the absence of regulation preventing the restriction of access to last-mile telephone lines and cable networks, companies can preserve monopoly positions despite fierce price and service competition.24 22United States Court of Appeals for the District of Columbia Circuit, June 28, 2001, United States of America v. Microsoft Corporation; appeal on District Court of Columbia Circuit, 97 F
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From page 185... ...
One important current question is the extent to which the explosion of e-commerce will so shift the makeup of the user community, and so influence the structure and operation of global networks, that network values will be substantially affected. The commercial opportunities offered by the Internet are largely related to the privatization of digitized information and, to a lesser extent, the means for obtaining and using it.
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From page 186... ...
Many of the commercial opportunities offered by new technologies are based on obtaining and using more complete information about consumers their needs, tastes, and patterns. Having such information allows sellers to locate individuals who may want their services and to customize those services; developing databases that aggregate such information helps companies to plan marketing strategies.
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From page 187... ...
The protests of many in the scientific community about the WIPO Copyright Treaty and the Digital Millennium Copyright Act stemmed from this kind of concern about restrictions on the availability of scientific data for use in research. Second, there is concern that the commercial availability of derived data products will reduce the incentive for public agencies to make the same data available in convenient alternative forms.
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From page 188... ...
Over and above those issues, however, is what may be labeled the decoupling of commerce and community, which the expansion of e-commerce may well provoke. Commerce, particularly local commerce, is a social activity that promotes community connections, reinforces community values, establishes community identity, and supports community development.
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From page 189... ...
What remains an interesting question is whether these various patterns of acceptance or tension will lead to changes in local values or to a pattern of e-commerce development that differs noticeably from the penetration pattern of global networks themselves.
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