E-Commerce: News Briefs

December 6, 2011

The Official Merchant Services Blog continues to follow some of the top trending stories in the e-commerce industry. E-commerce is an essential growth element in most retail businesses. This has been building for years, as online shopping becomes more and more a convenient and commonplace fact of life for the everyday consumer.

E-Commerce Sets Record Highs

It became clear that e-commerce is a titanic force in the marketplace when Cyber Monday sales results came trickling in. But the robust clicks business continued. Now reports are indicating that e-commerce had a record setting week. This internet retailer article said that consumer spending reached at least $1 billion on three separate days last week according to the web measurement firm comScore Inc. This means that three of the four recorded billion dollar spending days for e-commerce occurred last week –– the fourth was Cyber Monday 2010.

The statistical breakdown shows that shoppers spent $1.25 billion on Cyber Monday 2011, the single highest spending day recorded for e-commerce by comScore. This was followed up by $1.12 billion on Tuesday and $1.03 billion on Wednesday. In the time period between Nov. 1 and Dec. 1, 2011, consumers so far this holiday shopping season have spent more than $18.69 billion with online retailers ––up 15% from approximately $16.25 billion at the same point last year.

Will The Trend Continue?

The article quotes comScore chairman Gian Fulgoni as saying “As the deals from this week expire, it will be important to see the degree to which consumers return to the same retailers to continue their holiday shopping, thereby helping improve retailers’ profit margins, or if we experience a pullback in consumer spending—which has occurred in previous years—before promotional offers and spending intensity pick back up in earnest around mid-December.”

Free Shipping appears to entice online shoppers in a major way. According to the article 63.2% of all online transactions last week included free shipping. This makes a lot of sense, since free shipping evens the playing field in the bricks vs. clicks battle. With shipping costs taken out of the equation, it comes down to convenience and price. It’s much easier for shoppers to visit a website instead of fight crowds and stand in line. And the Cyber Monday deals –– many of which got extended past Monday prompting the nickname Cyber Week to emerge –– keep the pricing war ultra competitive.

SOPA Update

With e-commerce business booming so much in the holiday shopping season, the Stop Online Piracy Act (SOPA) and its latest developments become more and more important. According to this PC World article, a bipartisan group of lawmakers have come out in support of a new law that has been proposed as an alternative to SOPA.

Under this proposed legislation, the U.S. International Trade Commission (ITC) would be given the power to investigate claims of copyright infringement on foreign websites. The proposal would also allow the ITC to issue cease-and-desist orders to foreign websites that willfully engage in copyright infringement. The lawmakers demonstrate some clever ingenuity here with this proposal by tapping the ITC for the job of piracy oversight. The ITC already investigates patent infringement complaints and can bar infringing products from being imported into the U.S.

Host Merchant Services offered up an extensive analysis of SOPA, including the history and development of previous laws that affect online piracy and intellectual property rights.

What is notable about this new law being proposed? Two of the legislators supporting the use of the ITC as copyright infringement oversight are Ron Wyden [D-OR] and Zoe Lofgren [D-CA]. Wyden is notable because he was the one that effectively killed the Combat Online Infringement and Counterfeits Act of 2010 in the Senate. Lofgren is notable because she is one of Congress’ leading experts on the internet and has spoken out against SOPA on her own website. Having these two support a proposed law that seeks to combat online piracy is a pronounced development.

The new proposal seeks to clean up the problem of SOPA by giving it a more streamlined and functional process for copyright infringement claims. Under the new proposal the ITC could also investigate complaints of copyright infringement by foreign websites. Owners of the websites would be invited to present their side to the ITC, and the public would be notified of investigations, as the ITC does in patent investigations. ITC rulings against websites could be appealed to a U.S. appeals court. All of these aspects are different from the broad powers that SOPA grants to the Department of Justice.

As the article explains: “SOPA would allow the DOJ to seek court orders to stop online ad networks and payment processors from doing business with foreign websites accused of enabling or facilitating copyright infringement. The DOJ-requested court orders could also bar search engines from linking to the allegedly infringing sites and order domain name registrars to take down the websites and Internet service providers to block subscriber access to the sites accused of infringing.

SOPA would also allow copyright holders to seek court orders requiring online advertising networks and payment processors to stop supporting the alleged infringers if those businesses do not comply with requests from copyright holders. The court orders requested by copyright holders could target U.S. websites and services that enable or facilitate copyright, in addition to foreign websites.”

The proposal states its case as being a better alternative to SOPA here: “We found that using trade laws to address the flow of infringing digital goods into the United States makes it possible to avoid many of the pitfalls that would arise from other legislative proposals currently being advanced to combat online infringement. Namely by putting the regulatory power in the hands of the International Trade Commission – versus a diversity of magistrate judges not versed in Internet and trade policy – will ensure a transparent process in which import policy is fairly and consistently applied and all interests are taken into account. When infringement is addressed only from a narrow judicial perspective, important issues pertaining to cybersecurity and the promotion of online innovation, commerce and speech get neglected. By approaching digital good infringement as a matter of regulating international commerce, we are able to take all of these factors into account.”

In short, this proposal focuses on the copyright infringement that is at the root of the online piracy, instead of on the payment processors and e-commerce sites that could get caught up in the broad crackdown that SOPA could initiate.

What’s Your Major? E-Commerce

We noted this on our Facebook Page yesterday, but feel the need the mention it in our blog as well. E-commerce is now becoming a path of study in college. This Practical E-Commerce article links to 15 different e-commerce focused course programs being offered by various institutions, including Carnegie Mellon, University of Maryland, and Temple.

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