NetChoice Names the 10 Worst Internet Laws of 2012

Mar 22, 2012, 06:00 ET from NetChoice

Legacy regulations being used against innovative businesses top 2012 iAWFUL

WASHINGTON, March 22, 2012 /PRNewswire-USNewswire/ -- NetChoice, a coalition of Internet and e-commerce companies committed to defending online freedom, today called out America's worst Internet laws with the release of the 2012 Internet Advocates Watchlist for Ugly Laws (iAWFUL). In a first for iAWFUL, the worst offender on the 2012 list is not a new measure, but a patchwork of legacy regulations that are being used to block online innovations.

Over the past year, innovative emerging business models like the mobile-enabled car service Uber, online rental tool Airbnb, and the popular TrueCar have been tripped-up by legacy regulations -- many of which were written long before the advent of the Internet.  Rather than protect consumers, these regulations are increasingly being used to protect old-line businesses against innovation and to limit the choices available to consumers.

The full 2012 iAWFUL list is now online

"Now, in addition to fending off new, misguided efforts to regulate the Internet, innovators have to be concerned about a confusing and often contradictory patchwork of legacy regulations creating new obstacles to e-commerce and online services," said Steve DelBianco, Executive Director of NetChoice. "It's a cruel irony that these regulations, which were created to protect consumers, are now being used to limit their choices and online opportunities."

The legacy regulations in question include long-standing taxi commission rules, hotel regulations, and dealer franchise laws. These laws aren't "awful" in the traditional sense of iAWFUL, but all are being used in ways they were never intended, DelBianco said.

The good news about this disturbing trend is that in many cases the laws don't need to be changed to protect innovative business models and online consumers. NetChoice is urging local, state, and federal regulators around the country to stand up and send a clear message that these laws should not be misused to block consumer-empowering Internet tools. 

Coming in at number two on this year's iAWFUL list is an effort being pursued in Congress and in a handful of state legislatures, to impose heavy-handed rules on Internet and mobile applications that use location technology. The law would require users to click through a pop-up every time they used a location-enabled app – even if the app in question is specifically advertised as a location tool (such as Foursquare).

Rounding out the "top" three on the list is the ongoing federal effort to force online retailers to collect sales taxes regardless of whether they have physical presence in a state. Despite pleas from small businesses, which stand to lose the most from these efforts, the bills in the House and Senate provide little meaningful relief for small sellers. Also, the measures would transfer authority from state legislatures to a cartel of unelected tax administrators.

Rather than try to work with small e-commerce sellers, the advocates of so-called "streamlined" sales tax -- backed by big box retail chains –  are pushing for the most aggressive (and regressive) version of the bill.

2011 Success Stories

The iAWFUL list is not an academic exercise. NetChoice uses the list as a tool to actively oppose measures that threaten to stifle and squelch innovation and e-commerce. Since the list debuted in 2009, iAWFUL has been instrumental in helping defeat or fix several awful bills in Congress and statehouses across the country. This past year marked several key successes for iAWFUL.

Although it's still on this year's list at number 2, the Federal mandate for remote retailers to collect state sales taxes failed to move last year despite an aggressive push by advocates. The federal data retention measure (number 3 on last year's list) also stalled amid concerns raised by NetChoice and others.

Elsewhere, an Indiana bill (number 6 on the 2011 list) mandating an e-mail registry for minors failed to move after NetChoice testified to explain unintended consequences. And a Missouri law preventing students and teachers from engaging on social networks (number 7 on the 2011 list) was repealed by the legislature.

NetChoice looks forward to similar success in 2012.

"As long as the Internet remains a force for progress and efficiency, there will be misguided, restrictive, and outright awful efforts to restrict and control it.  With iAWFUL we work to shine a light on these efforts so that today's bad ideas don't become tomorrow's obstacles to innovation and online freedom," DelBianco said.




SOURCE NetChoice