July 17, 2002 2:20 PM PDT

States may be blocking e-commerce

The Federal Trade Commission is planning to take a deeper look at whether some state laws illegally restrict Internet commerce.

Such laws could cost consumers up to $15 billion a year, FTC Chairman Timothy Muris said at a press conference Wednesday.

Muris said he formed a task force to study the matter and found that "there are many regulations that, although adopted ostensibly for one purpose, had the effect of protecting existing brick-and-mortar businesses from new competition in the Internet."

In a release, Muris and the FTC pointed to, for example, laws that prohibit sales of certain products online or that require e-businesses to maintain a physical office in their state.

The FTC will host a workshop in October to study the issue, including panelists from industry, academia, state, and federal government agencies, and independent public policy organizations. Topics covered could include retailing, automobiles, cybercharter schools, real estate and mortgages, health care, pharmaceuticals, telemedicine, wine sales, auctions, contact lenses, and casket sales.

The states and the federal government have previously fought over Internet-related regulatory matters. One of the more contentious issues has been how to apply local sales taxes to Internet purchases.

But regulatory issues have flared up in other areas, including online car sales, which are prohibited in many states.

 

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