Ralph Nader, E-Commerce Savior?

Last week, one of America’s legendary rebels threw his consumer watchdog hat in the e-commerce ring. He’s Ralph Nader, a consistently strong voice for the American consumer and a formidable opponent of corporate America.

This time, though, Nader’s target is the entire e-commerce industry, a movement he believes needs a Big Brother. According to Nader, the Internet is simply the next vehicle for consumer fraud, a runaway train with no conductor. Nader believes somebody needs to get ahold of e-commerce and give it a good talking to.

In fact, Nader is calling for the formation of a new World Consumer Protection Organization (WCPO). Its functions would include overseeing online privacy, e-commerce, intellectual property and Internet governance. The goal of the organization would be to reel in what Nader evidently sees as an anarchistic industry, before it has an opportunity to fully take advantage of ordinary consumers.

Does e-commerce need Ralph Nader? Maybe. Does it need some solution to fraud? Definitely — and soon.

Concern or Photo Op?

My first reaction to Nader’s high profile announcement was to wonder about the timing. Nader, who recently completed a highly unconventional and unsuccessful bid for the U.S. presidency, had been rather quiet since November 7th. And it’s not like Ralph Nader to fade into the woodwork.

So, the cynics among us might wonder if Nader is simply trying to stir up some attention-getting press. After all, he chose a National Press Club forum to unveil his proposal. You can’t get much higher profile than that.

But upon closer examination, his sentiments appear heartfelt. In his appearance at the Press Club, Nader referred to a Harris poll that revealed 6 million Americans felt they had been defrauded online in the last year.

“The technology of the Internet is way ahead of any legal framework, or any ethical framework, or any public awareness,” Nader said.

The man has a point. After all, if a consumer is swindled by an unsavory e-tailer, options for retribution are limited at best.

Pipe Dreams Come True

Nevertheless, Nader’s Raiders have often found that their ideas, no matter how well-founded, do not come to fruition. Most countries at this moment are taking a strictly isolationist approach to electronic commerce. To ask an industry that is already battling over taxation and uniform encryption policies between borders to suddenly have a warm and fuzzy international moment seems like a stretch.

But then, so did requiring seat belts and other safety measures in automobiles back in 1965. That was the year Nader sued General Motors, a move that ultimately resulted in the president of the company appearing before a Senate committee in one of those chest pounding mea culpa moments.

The result? Massive design changes were implemented for auto safety, thousands of lives were saved and the words Ralph Nader became positively ingrained in our cultural psyche.

The moral of this story is not to underestimate the power of one citizen, particularly when his name is Nader. True, it’s not 1965 and the Internet is quite different from motor vehicles. But it is possible that Nader has proposed his idea for worldwide Internet regulation at a time when the industry has found itself most vulnerable.

The Trust Factor

How vulnerable? Talk to consumers how much they truly trust the e-commerce experience,and the responses are likely to be sobering.

When the Information Technology Association of America (ITAA)asked 1,000 adults about digital signatures, 72 percent said they do not feel secure enough to use them on legal documents. eMarketer found that55 percent of British Net users think cyberspace is the riskiest place to shop.And Forrester Research said that e-commerce could have been almost US$12 billion greater in 2000 if consumers felt more secure shopping online.

Okay, okay, everyone’s heard it all before; the startling figures and the corporate frustration — not to mention the government threats to intervene and the consumer hesitation to reveal personal data online. But how many people are doing something about it?

Correctly or incorrectly, Ralph Nader perceives a vacuum. So he is stepping up to do what he’s been doing best for decades: tuck America in and turn on the night-light.

Proactive E-tailers

All of this insecurity begs the question: In whom should we trust? Nader? Other watchdog groups? Government regulation? Or, once and for all, can the e-commerce industry learn to regulate itself?

No doubt, plenty of people would like to see industry self-regulation before Nader or anyone else implement their two cents on addressing fraud. Well, now is the time. The new e-tail establishment needs to get serious about protecting consumers, beefing up the security infrastructure and bolstering the industry’s credibility. Step one is to make privacy policies worth more than the paper on which they are written.

And even if the Nader solution — a global overseer of consumer protection — is the best solution, making it happen could take years, years we realistically don’t have to cultivate an e-commerce constituency. We’re already running way late in gaining the trust of consumers. It’s really up to individual companies to work one by one to ensure the safety of the online shopping experience.

Trust in E

If e-tailers would become consistently reputable and do the right thing, chances are they could spend less time dodging governmental bullets, such as Senate intervention into issues that many legislators clearly do not yet understand. E-tailers could also worry lessabout how far back Nader is rolling up his sleeves.

Trust is not something that can be legislated anyway. Trust in e-commerce will have to be earned through honest transactions.

What’s at stake? Just the future of free enterprise on the Internet.

What do you think? Let’s talk about it.