[Federal Register Volume 67, Number 142 (Wednesday, July 24, 2002)]
[Notices]
[Pages 48472-48473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18704]


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FEDERAL TRADE COMMISSION


Public Workshop: Possible Anticompetitive Efforts To Restrict 
Competition on the Internet

AGENCY: Federal Trade Commission.

ACTION:  Notice of Public Workshop and Opportunity for Comment

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') 
announces a public workshop on ``Possible Anticompetitive Efforts to 
Restrict Competition on the Internet.'' The workshop will focus on how 
certain state regulation may have anticompetitive effects, and how 
certain business practices may raise antitrust concerns, in the context 
of business-to-consumer e-commerce. The workshop will be held at and 
administered by the FTC.

DATES: The workshop will take place on October 8-10, 2002. The workshop 
will be transcribed and placed on the public record. Any interested 
person may submit written comments responsive to any of the topics to 
be addressed; such comments should be submitted no later than the last 
session of the workshop. Any written comments received also will be 
placed on the public record.

ADDRESSES: When in session, the workshop will be held at the FTC 
headquarters, 600 Pennsylvania Avenue, NW., Washington, DC. All 
interested parties are welcome to attend. Pre-registration is not 
required.
    Written comments should be submitted in both hard copy and 
electronic form. Six hard copies of each submission should be addressed 
to Donald S. Clark, Office of the Secretary, Federal Trade Commission, 
600 Pennsylvania Avenue, NW., Washington, DC 20580. Submissions should 
be captioned ``Comments regarding ecompetition.'' Electronic 
submissions may be sent by electronic mail to ``e[email protected]''. 
Alternatively, electronic submissions may be filed on a 3\1/2\-inch 
computer disk with a label on the disk stating the name of the 
submitter and the name and version of the word processing program used 
to create the document.

FOR FURTHER INFORMATION CONTACT: Jerry Ellig, Deputy Director, Office 
of Policy Planning, 600 Pennsylvania Avenue, NW., Washington, DC 20580; 
telephone (202) 326-3528; e-mail: [email protected]. Detailed agendas for 
the workshop will be available on the FTC home page (http://www.ftc.gov) and through Mildred Taylor, Staff Secretary, at (202) 326-
2553.

SUPPLEMENTARY INFORMATION:   

Overview

    In the past decade, there has been growing concern about possible 
anticompetitive efforts to restrict competition on the Internet. In 
particular, many states have enacted regulations that have the direct 
effect of protecting local merchants from competition over the 
Internet. For example, some states require that online vendors maintain 
an in-state office, while other states prohibit online sales of certain 
products entirely. Some scholars have argued that these regulations are 
often simply attempts by existing industries to forestall the entry of 
new and innovative Internet competitors, much as in prior eras, other 
entrenched producers have benefited from regulatory effort to impede 
new forms of competition.
    Similarly, some private companies have engaged in conduct that may 
raise antitrust issues. For instance, some manufacturers and dealers do 
not list prices for certain items online, and others do not sell 
certain items over the Internet altogether and urge horizontal 
competitors to do the same. Depending on the circumstances, some of 
these restrictions could be viewed as potentially anticompetitive. 
While much of this regulation and conduct undoubtedly has pro-
competitive and pro-consumer rationales, the regulations impose costs 
on consumer that, according to some estimates, may exceed $15 billion 
annually.
    For these reasons, a workshop on possible anticompetitive efforts 
to restrict competition on the Internet is timely, and will build on 
previous FTC-sponsored events that addressed other aspects of e-
commerce.\1\ In order to enhance the Commission's understanding of 
particular practices and regulations, the workshop will have panels to 
address certain specific industries, including some or all of the 
following: retailing, automobiles, cyber-charter schools, real estate/
mortgages, health care/pharmaceuticals/telemedicine, wine sales, 
auctions, contact lenses, and funerals (caskets).
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    \1\For more information on previous FTC-sponsored events 
regarding e-commerce, see http://www.ftc.gov/opp/ecommerce/index.htm; http://www.ftc.gov/opa/2000/05/b2bworkshop.htm.
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    Each of these industries has experienced some growth in commerce 
via the Internet, but according to various commentators, each also may 
have been hampered by anticompetitive state regulation or business 
practices. See. e.g., Atkinson, The Revenge of the Disintermediated 
(Jan. 2001) (report of the Progressive Policy Institute); Atkinson and 
Wilhilm. The Best States for E-Commerce (Mar. 2002) (second report of 
the Progressive Policy Institute). In addition, these industries 
involve goods and services that comprise a very large portion of a 
consumer's budget, such as homes, cars, schools, and health care.
    It is intended that each industry panel have at least one 
independent analyst or academic, and also have representatives from the 
affected industries (on both sides of the issue). Where appropriate, 
the panel also will include a representative from a government agency, 
including (where appropriate) representatives from different states. We 
hope that each panel will provide all sides of the issue, including the 
perspectives of industry, intermediaries, consumers, and regulators.
    The Commission also invites comments concerning other industries, 
not listed above, that may raise similar issues and merit similar 
examination.

Issues

    Below is a non-exhaustive list of issues to be addressed by the 
workshop. Written comments need not address all of these issues.

1. General Issues

    What role does competitive law and policy play in fostering or 
hindering e-commerce? From a practical business perspective, how does 
each foster or impede e-commerce? What do empirical studies show?
    Does state regulation have protectionist effects, and if so how? 
What are the benefits of such regulation, and do the benefits outweigh 
the costs? What is the prevalence of such state

[[Page 48473]]

regulation? Are some types of regulations more friendly to e-commerce?
    Do businesses try to limit competition over the Internet through 
anticompetitive efforts, and if so how? What are the business 
justifications for these efforts?

2. Issues for Particular Industries

Retailing
    How and why do manufacturers limit their distributors' sales of 
certain products over the Internet? What are the costs to consumers? Do 
distributors pressure manufacturers into limiting sales over the 
Internet, and if so how? Are such efforts facilitated by horizontal 
agreements? Does such conduct raise antitrust concerns, and are there 
legitimate business justifications, such as concerns about free-riding, 
for limiting e-commerce sales?
Automobiles
    Have manufacturers been forced to limit Internet sales of 
automobiles, and if so how? What are the costs to consumers? Are there 
legitimate concerns about free-riding or differentials in bargaining 
power? Are there different issues concerning the sale of new and used 
cares? What regulations have been applied to the sale of new or used 
cars through online auction sites? Does state regulation have the 
effect of protecting dealers from competition, to the possible 
detriment of consumers, or does existing state regulation provide 
important protection to consumers?
Cyber-Charter Schools
    How have states fostered or hindered cyber-charter schools? What 
are the competitive benefits of cyber-schools? Are there legitimate 
consumer protection concerns? Do the efforts of some school districts 
to limit cyber-charter schools raise any antitrust issues? What is the 
current status and focus of litigation, and what types of legislative 
solutions are possible?
Real Estate/Mortgages
    What types of state regulations limit online real estate an 
mortgage services? What are the costs to consumers? What is the impact 
of regulations requiring real estate closings or refinancing to be 
conducted solely by attorneys? What are the pro-consumer rationales for 
such regulations, and are there less restrictive means of achieving the 
same goals? What is the impact of Internet competition upon real estate 
commissions,and how are realtors responding to that competition?
Health Care/Pharmaceuticals/Telemedicine
    What types of state regulations limit online provision of health 
care goods and services, such as pharmaceuticals and telemedicine? What 
are the costs to consumers? Are these regulations directed mainly at 
out-of-state competitors? Are online prescriptions particularly 
susceptible to abuse? What are the pro-consumer rationales for 
regulations, and are there less restrictive means of achieving the same 
goals? Are reciprocity statues an effective way to dealing with these 
issues?
Wine Sales
    How does the ``three tier'' system for distributing wine limit 
online sales, and are there legitimate justifications, such as 
temperance or taxation, for the system? What are the costs to 
consumers? Are there separate and measurable price and variety effects? 
Are there less restrictive means for achieving the same goals, and are 
reciprocity statues a viable alternative? What is the status of the 
ongoing litigation addressing this system?
Auctions
    How have states applied their existing auctioneering regulations to 
online auction sites? What are the costs to consumers? Have states 
enacted new regulations targeted at online auctions? Do such 
regulations limit competition from online auctions, and if so how? Do 
those regulations impact large and small online auctioneers 
differently? To what extent are online auctions replacing traditional 
retail outlets, for consumers goods, automobiles (new or used), and 
other products? What types of state regulation can best protect 
consumers while still allowing competition from online auctions?
Contact Lenses
    What types of state regulations limit online sales of contact 
lenses? What are the costs to consumers? What are the health 
justifications for such regulations, and how valid are they? Are there 
separate issues for replacement lenses or disposable lenses? How should 
prescription requirements be administered? Have manufacturers limited 
the supply of contact lenses to online vendors, and if so why?
Funerals (Caskets)
    What types of state regulations limit online casket sales? What are 
the costs to consumers? What are the pro-consumer rationales for such 
regulaitons, particularly in light of the recent controversies? Are 
there less restrictive means of achieving the same goals? What is the 
status and focus of current litigation?
    The Commission welcomes suggestions for other questions that also 
shuld be addressed. Proposed questions, identified as such, may be sent 
by electronic mail to [email protected].

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 02-18704 Filed 7-23-02; 8:45 am]
BILLING CODE 6750-01-M