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“Why E-Commerce is Like a Bottle of Tylenol”

Explore parallels between E-Commerce and Tylenol, highlighting shifts in consumer trust and the pivotal role of trustwrap agreements. Trace the evolution of E-Commerce from pure plays to clicks and bricks, emphasizing the importance of legal guarantees and consumer protection. Learn how platforms like eBay act as a shadow legal system, enforcing buyer and seller rights. Contact Prof. Peter Swire for insights on the changing landscape of online commerce.

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“Why E-Commerce is Like a Bottle of Tylenol”

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  1. “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

  2. Overview • Bottle of Tylenol • What we used to think about E-commerce • What we should think now about E-commerce • Conclusion

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

  4. Tylenol and E-Commerce • You’ve heard of “shrinkwrap” and “clickwrap” • Meet “trustwrap” • What sorts of trustwrap will work for E-commerce

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

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

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

  8. The end of intermediaries? • eBay • The initial dream of community and feedback as sufficient

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

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

  11. Conclusion (cont.) • Competition in trustwrap • “Infomediaries” haven’t succeeded • 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

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

  13. Contact Information • Professor Peter Swire • Phone: (301) 213-9587 • Email: pswire@law.gwu.edu • Web: www.osu.edu/units/law/swire.htm • Presidential Privacy Archives: www.privacy2000.org

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