There's No Immunity from Reality

Posted On: 2009-01-22

Well we're in for a really hot and humid day here today so in a little while I'm heading for the airconditioned comfort of our office downtown but before I do head out let's take a few moments to look at where we fit in the world.

Because we're part of the World Wide Web we tend to think of ourselves as part of a global entity that is way beyond the minor irritations of local laws and ordinances and free of the restrictions petty local politicians might want to try and bind us with. Yep, we tend to think globally rather than locally and believe that we're just about untouchable and maybe even bullet proof.

Well that's nice and there's nothing wrong with being delusional now and again if it helps you sleep better at night and feel more comfortable about the future ... but it is just that ... delusional.

Just because our business is part of the World Wide Web it doesn't mean that we're part of some brave new world that's totally free of all the impediments that a bricks and mortar business down the street has to face. The guys who run those businesses have to comply with local ordinances ... state laws ... federal laws and all the crud that comes with those laws and now we're beginning to find that we're going to have to comply with them and be affected by them too.

As I said earlier this month, online merchants who use affiliate marketers are soon going to find that the State of New York isn't the only one that's going to try and impose sales tax on all online sales made within their state. You can bet that it will soon go beyond mere States that want a slice of the pie and I'm sure that countries around the world are going to be looking at taxing online sales too.

But it's not only taxes that are going to cause us some headaches in the future. Already we're beginning to see what, on a global scale, amounts to petty local politicians, wanting to exert a major influence on businesses that exist in other countries and have no real-world presence in their state at all.

Last year the Governor of Kentucky decided that his horse racing industry needed some protection so he decided that he had the right to seize the domain names of 141 gambling sites even though those sites had no real presence in Kentucky at all. There's also an irony here that the horse racing industry - something wouldn't exist without gambling - needed protection against the online gambling industry ... but I digress.

So here we have a local politician on the global scale feeling that somehow he had the right to seize domain names that were the property of companies in other parts of the world. Apparently there is a law in Kentucky that allows for the seizure of gambling 'devices' and that's the law that the Governor was using to justify his actions.

Of course there were plenty of people who thought he didn't have a right to seize anything that belonged to a business that had no physical presence with the state and a number of groups lodged appeals against the Governor's action.

The appeals were heard in Kentucky and in due course the Governor lost ... but not for the reasons that you might think. While the appellants pleaded that the Governor had no legal right to seize domain names because it was unconstitutional to use the law in this way, and the Governor had little or no jurisdiction beyond his state borders, the judges of the appeals court thought differently.

They found in favor of the appellants but their reasoning wasn't that the law was unconstitutional in this case but that there was a technicality involved. The technicality was that in their view a domain name was not a 'device' used for gambling as described by the law that the Governor was relying on.

So there was a win for the good guys ... but we shouldn't start cheering just yet. You can bet that the Governor is already looking at having that particular law rewritten to include domain names in the list of items that constitute gambling 'devices' and the problems will then start all over again.

While this time it was all about gambling how long will it be before some politician who wants to win a few votes decides that the way to put online porn out of business is by coming up with a law to allow them to seize the domain names we use? How long will it be before some hard-line Islamic country decides that it wants to do the same thing and punish the site owner as well?

When that time comes what are we going to do if some judge decides that the law really is in their favor and not in ours?

It's time to stop thinking that it will never happen or that we are somehow above what happens out there in the real world simply because our business is on the World Wide Web. It's time to start paying attention to what is happening around us at the local level and preparing for the day when the world wide web is suddenly confronted by something very real that's happening down the road from your place or mine.