Ray Nimmer, the Dean and Leonard Childs Professor of Law at the University of Houston Law Center, is one of Houston’s foremost legal thinkers and an internationally recognized expert in legal issues relating to e-commerce. Ray’s academic and administrative duties do not leave him much time to blog, but when he does, it’s always worth reading. His latest post is on the risk of over-regulating e-commerce:

In our world, significant change seldom flows smoothly. While many embrace change, others resist it. Some of the resistance is due to what Lewellyn explained years ago: ìYou wake up then to the fact that the throne your subject matter once occupied is overshadowedî; that is a fearful situation for many. The costs imposed on commerce by reaction to that fear are extravagant and harmful.
In my view, rather than protecting the status quo, the role of law generally should be to establish a responsive body of rules that support change and that limit regulation to cases where actual clear abuse otherwise exists. This has been the tradition of U.S. commercial law. But it has not consistently been the way in which law related to electronic commercial transactions has evolved. Instead, we have seen an explosion of new law, often regulatory in nature, . . . Too often, political arguments and interest group politics weigh in toward the view that the proper role of law is to regulate commerce, rather than to support it. Much of this lies simply in a grab for position enforced through law, rather than in the marketplace. . .
But when a regulatory approach is taken in a period of rapid social change, the result is an enormous expansion of new law and we pay a huge price for this. Its short-term effect lies in the creation of an often-bewildering array of new rules and regulations with which commercial entities must deal, and which seldom reflect sound or considered legal or social policy.

Read the entire post.