The bumpy road of Electronic Commerce

Electronic commerce is widely expected to promote “friction-free” capitalism, with consumers sending software agents to scour the Net for the best deals. Many distribution chains will indeed be simplified and costs substantially reduced. However, we are also likely to see the creation of artificial barriers in electronic commerce, designed by sellers to extract more value from consumers. Frequent flyer mileage plans and the bundling of software into suites are just two examples of the marketing schemes that are likely to proliferate. It appears that there will be much less a la carte selling of individual items than is commonly expected, and more subscription plans. Therefore many current development plans should be redirected. Electronic commerce is likely to be even more exasperating to consumers than current airline pricing, and will be even further removed from the common conception of a “just price.” As a result, there are likely to be more attempts to introduce government regulation into electronic commerce.