Opinion

Stop Messing With Internet Businesses

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Gary Shapiro
President and CEO, Consumer Electronics Association
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      Gary Shapiro

      Gary Shapiro is president and CEO of the Consumer Electronics Association CEA)® the U.S. trade association representing more than 2,000 consumer electronics companies, and a New York Times best-selling author. His views are his own. Shapiro's latest book, Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses, will be released in January. Connect with him on Twitter: @GaryShapiro.

The United States leads the world in the commercialization of the Internet. This is not only good for the investors and employees of Internet companies; we all benefit as these entrepreneurs pay taxes, create jobs and provide services. Today we buy and sell cars online. And groceries. And books and computers and plane tickets. More, we turn to the Web to find answers to just about all of our questions. Across the board, the Internet is one big economic bright spot in the U.S., creating new opportunities and enhancing our lives.

But backward government policies threaten these innovative new businesses and the Internet freedoms we all enjoy. Blatant protectionism is elbowing out progress, especially in our access to online goods and services. Just consider a few of the most recent examples:

  • Uber is an innovative mobile app that connects passengers with idle cars-for-hire, improving efficiencies on both ends of the transaction. But antiquated taxicab commissions are lobbying local governments to deny consumers the right to choose. As a result, Uber continues to be locked out of many major U.S. cities, including Las Vegas and Miami.
  • Airbnb is among the very latest disruptive technology success stories. The Web-based housing service offers accommodations around the world via a community marketplace, an option the company says has resulted in more than 11 million guest stays. But amid pressure from hotel associations, the New York attorney general and the San Francisco government are using subpoena power and self-appointed vigilantes to block citizens from renting their homes to visitors through the website.
  • Aereo leases tiny antennas to consumers, allowing them to stream over-the-air broadcasts on computers, tablets and smartphones – the same free, local television service broadcasters must provide to viewers who use their own TV antennas. This threat to television networks’ status quo recently landed Aereo before the U.S. Supreme Court, as broadcasters demanded that the Supreme Court reverse case law and rule Aereo’s TV-streaming service illegal.
  • Tesla electric cars cannot be bought in states like New Jersey, as state legislatures pass laws blocking sales outside brick-and-mortar dealers.

It’s the same story over and over again: as we break new ground online, the Internet has a tendency of disrupting legacy business models. Newspapers that used to print a few editions each day can now update their stories by the minute. Travel agencies were the main go-between for airline tickets and hotel stays, but now we can easily book our own flights. And now hotels, taxi companies, broadcasters and car dealers are panicking rather than innovating, as they see their traditional business models shaken up by disruptive technologies that give consumers more control.

These entrenched entities should not be allowed to use government regulations to stop innovation. They must compete. That kind of competition drives our economy and ensures future growth and innovation. Moreover, change is the fabric of America. The U.S. has maintained its lead in fostering Internet-inspired innovation by evolving; this is a competitive strength, and a national strategy worth fostering.

Sadly, government is yielding more often to the status quo, actively working to block Internet-driven innovation. Old monopoly businesses are using the force of law to keep willing buyers and sellers from doing business. This isn’t just bad policy – it’s inconsistent with freedom of association. Worse, it hurts citizens who want to do business with each other.