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Down by Law

Powerful industry lobbies are fighting tooth and nail to stop online competitors.

This story appears in the April 2002 issue of Entrepreneur. Subscribe »

Over the past two years, Old Economy companies ranging from wine wholesalers to contact lens manufacturers have used their lobbies to inhibit e-commerce. For example, last January, a federal law influenced by wine and spirits wholesalers curbed online wine sales. Similarly, some brick-and-mortar auctioneers have pushed for state laws inhibiting sales by eBay.

This protectionism has significant ramifications. The Progressive Policy Institute (PPI), a Washington, DC, think tank, estimates e-commerce barriers cost American consumers and businesses $15 billion annually. This wasted money often comes out of the pockets of entrepreneurs. Access Markets, a New York City research firm, estimates at least 5 million small companies currently conduct commerce on the Internet.

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