Property Rights, Technology, and Internet Distribution

Abstract

Lost in the discussion of the rapid growth of e-commerce is the role of the Internet as a means for the direct distribution of electronic goods and services. Any product that can be reduced to a string of digital code—text, images, and data—is capable of being transmitted over the Internet. These information intensive goods fall into three broad and overlapping categories: information goods, professional services, and entertainment goods. This paper discusses the implications of Internet distribution for competition, product quality, and pricing in consumer markets and how encryption technology addresses the property rights questions raised by online distribution.