Ecommerce Governance for Starting Businessmen
Theodore F. di Stefano of ecommercetimes.com reminded us that running a business demands thorough and regular rounds of housekeeping. He added that businessmen must be aware of the filing and payment of a multitude taxes, regulatory forms and statements. That is really true especially in the brick-and-mortar business world where the regulation is tough. Before one starts to trade, he has to convince several officers that he is a good one. Trading in the brick-and-mortar world is considered as a privilege and not a right. Even the simple act of exchanging goods without the necessary permits is considered as harmful and evil. The smart persons already found out (but they will never admit it) that doing business is very easy online. They can easily make business or transact with other people with the least regulations possible. These young businessmen don't have to burden themselves with nonsense. However, there are minor but necessary regulations which an online businessman must know and understand.
1) Protections against Fraud
The role of ecommerce governance is to make sure that individuals don't use force against another to deprive the other of his property especially if the way of deprivation is fraudulent. That is why swindling or using false pretenses to deprive another of his property is considered criminal in many states. Experiences of the past are what make such laws necessary. Many jurisdictions in the Western European sphere and even in the United States have enacted extremely tough laws to make sure that such fraudulent acts are punished whether they were committed online or offline. A starting businessman must at least accept that there is a need to regulate so as to prevent one exerting evil means for business ends. A free website is no longer free if people are already using dangerous schemes to hemorrhage the assets of another in the online arena.
2) The Online Businessman can Shop for Jurisdictions
In the brick-and-mortar world, the contracts which the businessmen enter in are governed by either the laws in the place of execution or the laws in the place where the contractors reside. Shopping for jurisdictions is a prerogative given to the online businessman. If he believes that he can address his online business at a certain place, he can do so as long as he is willing to abide by the rules. Suppose he desires to place his "online address" in the State of Vermont because of friendlier laws. He can do so as long as there is something to gain from his exercise of choice. Moreover, there is also what you call private regulations in the internet. If he desires to join a certain hypermarket for his business, he can do so provided he is willing to abide by the rules imposed by the owners and regulators of such hypermarkets. Craigslist and Facebook.com are good examples. The online businessman has the choice to place or sell his goods at a certain social networking website provided he follows the rules - prohibitions against spamming and provisions on paid advertisements.
3) The Internet is an Ever Growing Market
Wikipedia.org provided a good definition of the economist concept of the invisible hand. According to the contributor, it (the invisible hand) is used to describe the self-regulating nature of the marketplace. As long as the internet continues to grow, a discussion on ecommerce governance will never miss to mention the notion. It will be tested every now and then. States and governments will experiment on whether the economist's notion is still applicable online. Thus, the online businessman must always place in mind that there are two kinds of ecommerce governance. The first one is the state-sponsored governance wherein the market is regulated through the enactment of laws. The second one is the free market system wherein the private sector seeks to regulate itself for the sake of profits.
Have a question for Nathan or want to leave a comment?