They Might (Not) Be Giants

by Robert J. Wagman

David, look alive. Small businesses selling their wares via the Internet may soon have to adhere to a set of standards being drafted by some of the largest Web merchants around. Microsoft, America Online, AT&T, Dell Computing, and others have joined together to draft “model” international rules of conduct for all Internet retailers. These Internet retail leaders are worried that if the perception exists that the industry can’t police itself, federal, state, and even local governments will step in with a slew of regulations.

The Electronic Commerce and Consumer Protection Group (www.ecommercegroup.org), as the group calls itself, says it is devising “best practices” that Web retailers are free to adopt. The guidelines contain a range of provisions concerning truth in advertising, security standards for customer information, user privacy, disclosure of customer service and support policies, return and refund policies, and the use of online, independent third-parties for dispute resolution.

“The goal of the guidelines is to produce satisfied customers,” says Roger Cochetti, senior vice president of Network Solutions and a spokesman for the group. “Consumers should be empowered to deal only with reputable merchants, under terms that make them comfortable and with assurance that any disagreements can be promptly and reasonably resolved.”

But do they have small business’ best interests in mind? Whether or not the standards are good, small businesses didn’t have a say in their formation. Government agencies are often required to take the needs of small business into account; these guidelines, while not mandatory, did not. The architects of the plan have deep pockets, and if the group’s vision of Net-wide acceptance is realized, businesses with fewer resources may not have any choice but to climb on board. The group hopes that online merchants will prominently indicate they subscribe to these best practices and that competitive pressures will result in wide-spread compliance. “To build confidence in the online marketplace,” another group spokesman says, “consumer protection rules of the road are as important as on concrete highways.” But does it mean that only the big guys will get to ride in the fast lane?