For Release : October 30, 2003
Testifying today on behalf of the Federal Trade Commission before the U.S. House of Representatives Subcommittee on Commerce, Trade, Energy, and Consumer Protection of the Committee on Energy and Commerce, Office of Policy Planning (OPP) Director Todd Zywicki detailed the results of the FTC’s recent staff report on online wine sales in the United States, saying that e-commerce has benefitted consumers by increasing their choice in wines and providing access to a wider variety of products than previously available. While anticompetitive barriers to online wine sales and other types of e-commerce remain, the testimony states, the FTC’s report presents less-restrictive means than those currently in place to regulate consumers’ new purchasing alternatives.
The testimony begins by presenting the FTC’s experience in examining e-commerce issues, with a focus on the online sale and direct shipping of wine. In October 2002, the Commission held a workshop to study these issues, followed by the publication of a report entitled “Possible Anticompetitive Barriers to E-Commerce: Wine.” The testimony presents the findings of this report, including:
In closing the testimony, Zywicki said, “[The FTC’s] staff report concludes that consumers could reap significant benefits if they had the option of purchasing wine online from out-of-state sources and having it shipped directly to them . . . Indeed, in states that are litigating the constitutionality of direct shipping bans, several courts have found that the bans deprive the state’s consumers of lower prices and greater variety.”
Finally, the testimony points out that the wine issue has general implications for e-commerce. Anticompetitive state regulations can insulate local suppliers from online competition and deprive consumers of lower prices and greater selection. Although states have legitimate regulatory concerns, they may have less restrictive alternatives that would allow online competition and, ultimately, provide the greatest benefits to consumers. As part of its continuing focus on e-commerce, the Commission has strongly encouraged policymakers to adopt pro-competitive rules in many different industries, including contact lens sales, casket sales, and real estate and legal services.
The FTC vote to approve the testimony and place a copy on the public record was 5-0. The written statement represents the views of the FTC.
The FTC’s Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, D.C. 20580, Electronic Mail: email@example.com; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published “Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws,” which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.
Director, Office of Policy Planning
(FTC File No. P031201)