When Technology Turns Tradition on its Head
By Mike Shultz, Infoglide Software CEO
The rapid march of technology drives rapid change and, in some ways, the use of technology begins to undermine people’s habits that have endured for years and years. That’s a bold statement, but isn’t it interesting that Rep. Alice Borodkin, a state legislator in Colorado, is introducing a new law called the “Internet Auction Sales Act”. Her legislation will affect the longest-lived anonymous business transaction in the history of the world – the anonymous exchange of cash for goods.
For thousands of years, markets have existed that have allowed people to trade goods in an open way, exchanging money for product without the need for identification. Today, anyone can walk into Macy’s or Home Depot and buy anything for cash without ever giving any form of identification. In this case only one side of the transaction is anonymous – the buyer – and only if they buy with cash. Obviously, the buyer knows if he/she is in Macy’s or in the Home Depot. The buyer, in the case of Macy’s, has a good idea of who Macy’s is and how they operate their business. The legal understanding of contracts and purchases is well defined in case law and practice, and the courts have been actively involved in helping to protect the rights of the consumer for some time. Most retailers operate in accordance to local ordinances, and grievances are adjudicated locally.
Now comes the Internet auction site. Just exactly who are the parties to the transaction? Well, it’s hard to know exactly. The seller could be John55, whoever that is. The seller could be just about anybody. The buyer, however, has to be more defined. The buyer must have some form of payment that is tied to identity because mailing an envelope full of cash isn’t an option. And the buyer usually has to have an address to ship to that is tied to identity because receiving the goods in person isn’t often an option. So the buyer does not have anonymity.
Now that is turning the marketplace on its head, isn’t it? It used to be that the seller was known, and the buyer was anonymous. Now, the buyer is known, and the seller is anonymous. That is the point of Ms. Borodkin’s legislation. The technology that enables the 180 switch in who is who changes the whole relationship. Like, are the products legitimate? Is the chain of custody intact? Does the transaction enjoy the support of the manufacturer? Is the buyer buying stolen products that put money into the hands of criminals? Are the proceeds of the transaction being used to support something as awful as terrorism?
I am a technology guy. I have been for all of my adult life. I think technology changes the world in good ways. Technology also brings issues. Issues that have to be thought about. Issues that have lots of implications.
As for me, I am pleased that Ms. Borodkin will bring this issue to light. Discussion and debate is good. So is technology. If we talk about the issues that technological advances bring, it’s my opinion that we can continue to make progress. What do you think? Please feel free to leave a comment with your thoughts.
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February 8th, 2008 at 6:51 pm
Frankly, I am amazed that the CEO of a technology company would see Rep. Borodkin’s bill as anything but what it is – an attempt to stop competition from online auctions. Online marketplaces have operated successfully with this so-called anonymity factor, to the satisfaction of millions of buyers! That’s because market forces are at work – such as buyer and seller ratings and the ability for buyers to read detailed seller evaluations written by other buyers. Add the fact that great deals are done every day in online auctions, and that makes for some powerful competition. No wonder the retailers are afraid!
Steve DelBianco
NetChoice