Uncle Sam Takes a Slice of E-commerce

by Tim Duggan

Forget regulation, there’s a more lucrative game in town. The U.S. government has taken to selling e-commerce services, and just what that means for the private sector has become a hot topic of debate among business advocacy groups, Congress, and government agencies.

The U.S. Postal Service’s eBillPay, which lets consumers schedule and make payments as well as receive and pay bills on line, has generated controversy since its launch in April 2000. While the Postal Service may view eBillPay as an opportunity to generate extra revenue, the Computer and Communications Industry Association (CCIA) sees it as potentially harmful competition.

“Many of our companies have seen the government move from providing e-government services to providing what are inherently e-commerce or private sector services,” says CCIA vice president and general counsel Jason Mahler. “Competing against the private sector and offering services that companies in the private sector are offering is a clear distinction.”

Mahler adds that government agencies have an unfair advantage over the private sector: They can borrow money from the federal government and receive certain tax exemptions. This past fall, the CCIA testified before the Subcommittee on Treasury, Postal Service, and General Government to promote a government-wide moratorium on activities that duplicate or compete with private-sector e-commerce.

Not everyone sees eBillPay as a threat to the private sector. Jeremy Sharrard, an associate analyst at Forrester Research, doesn’t regard online activities as one of the government’s key strengths anyway. “If the private sector can develop a product, they can do the job better than the government,” Sharrard says. “I think the private sector will have more success just because of the time lags built into government innovation and approval of processes.” Leaving pols with ample time to tackle that new voting booth design.

Small Business Computing Staff
Small Business Computing Staff
Small Business Computing addresses the technology needs of small businesses, which are defined as businesses with fewer than 500 employees and/or less than $7 million in annual sales.
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