I haven’t really be following the growing competition in hybrid and plug-in hybrid car systems, since at the moment I don’t need a new car, and even if I did I’m a graduate student, which means no one is going to give me a car loan anyway. I believe that there is a great deal of potential in this product category, especially if some of the new technologies to provide electricity generation at home pan out. Imagine having a bank of solar cells on the roof of your garage to charge up your car, which you then use to commute. Once you’ve paid for the basic systems (possibly including a battery in the garage to store energy gathered when you’re not home), your fuel costs would be effectively zero for however long the car lasted, and your carbon footprint would be effectively zero also. But for the moment, hybrids are expensive, and the plug-in hybrids are even more so, while the pure electric vehicles have issues of their own…
Consider the case of the new Nissan Leaf, as profiled by The New York Times website. The Leaf is a pure electric vehicle, which means it does not have a gasoline motor and has no emissions whatsoever. There’s some debate as to how much it would actually cost to operate, but the EPA lists the Leaf’s annual energy costs as being about $561, which is less than the Toyota Prius and less than one-third what it would cost to buy gas for a conventional mid-sized car. Unfortunately, the EPA also lists the Leaf’s range as being just 73 miles – much less than the 100 claimed by Nissan, and significantly worse than the Prius (which can, theoretically, reach 600 miles on a full tank under optimal conditions). Even more to the point, recharging stations can be hard to come by on the open road, which means that you probably shouldn’t ever go more than 35 miles from home unless you know ahead of time where you can plug in the car…
This particular worry is known as “range anxiety” to the industry writers, and it has always been a major drawback to electric cars. If you use them exclusively for short trips – such as a short-range commute like mine, or running errands around a small town – they’re reasonably effective, but once you consider a road trip to anywhere you start having problems. In my case, even the run to Detroit to see a baseball game is out of range, and going to Ann Arbor would be impossible unless there was a public charging station I could use there – assuming I’d be there long enough for the Leaf’s battery to charge back up. This limits the utility, and therefore the desirability, of the product, and removes a significant number of customers from the potential market for this vehicle, and who’s even mentioned long-term issues like figuring out how to dispose of the car’s battery yet?
Of course, similar objections apply to bio-fuels, ethanol, hydrogen fuel cells and even “clean” diesel engines (you can’t get low-sulfur diesel fuel in many larger cities), while hybrid vehicles (including the so-called “plug-in hybrids”) have the drawback of still using gasoline for fuel, albeit in smaller quantities. It’s possible that one of the various technological fixes, such as a network of public charging stations, recharging facilities at existing gas stations, larger storage cells for electric car batteries, or portable solar power panels will solve the problem, and in a few years you’ll see pure electric cars on the road the way we’re starting to see hybrids. On the other hand, it’s possible that some other new development is coming, and all of these alternative power sources will someday seem as quaint as the steam-powered cars of the late 19th Century…
I’m just grateful that for the moment, at least, my commute is only eight minutes each way…
Wednesday, November 24, 2010
Tuesday, November 23, 2010
Deficit Thinking or Thinking Deficit
Ever since the midterm elections the debate about the national debt has been heating up again, to degrees not seen since the mid-1980’s arguments about the same topic. This blog isn’t supposed to be political, but taxes, and especially business-related taxes, do relate to our primary topic, and there was an article this week in the Wall Street Journal that points out one of those traditional blind spots in which neither side of the political spectrum appears to have much of a grasp on reality: deficit spending and increased taxation…
The linked article follows up on a classic study in economics from the 1980s, which showed considerable support for the contention that every dollar of new taxes leads to more than one dollar of spending by Congress. In fact, the Vedder and Gallaway article found that for each new tax dollar, our Federal government generated $1.17 of new spending (17% more than the tax increase). The updated study is considerably more sophisticated, taking into account a much longer time period, and controlling for a range of different variables, but the alternative models suggest a tax-to-spend relationship of between $1.05 and $1.81, depending on where, when, and how the data is arranged. Nor does this pattern appear to be changing – in the years from 2008 to 2010 the present Congress has approved over $ 1 trillion, which violates all of the existing budget rules…
Now, as a political moderate, I’m not going to claim that the bailout wasn’t needed, or that we can just start slashing social programming without horrible long-term repercussions, or that our military spending is out of line with post-Cold War conditions, or any of the other standard formulae that people like to spout instead of actually wading through millions of pages of dust-dry government documents; I’m just pointing out that regardless of what you think of deficit spending (whether you’re for it or against it), our government has NEVER been able to reduce the deficit by raising taxes. It’s always possible that conditions will be different somehow this time around, but after 65 years and 13 Presidential administrations, no one has ever succeeded in doing so. Which makes the present call for things like a 6.5% national sales tax nothing more than political grandstanding…
From a business standpoint, there’s no reason to expect any member of Congress to show any fiscal responsibility, simply because there is no benefit for any of them to do so. On the contrary, the way most of our representatives continue to get elected is to bring economic advantages (e.g., jobs, entitlements, benefits and pork) to their home districts and/or states. Any member of Congress who could somehow manage to bring funds to their constituents while making somebody else pay for all of them would be elected for life, and in fact many of our longer-serving politicians have spend decades in office doing just that, or at least creating the illusion of doing so. By all indications, the problem with the current system isn’t that we aren’t being taxed enough, or even that we’re being taxed too much, but rather that our taxes are being spent on the wrong things…
Several authors have noted that deficit spending by our national government is, in effect, taking the benefits and making someone else pay for them – in this case, someone else being whoever the tax-paying public is twenty to fifty years from now. Personally, I believe that our government can dig itself out of the hole it’s currently in, by investment in industries and enterprises that will raise our tax base under existing tax law (and coincidentally create jobs, raise our standard of living, improve our trade balance, and fix our broken economy), and that might even be true. The two things that history teaches us about this issue are that whatever else tax-and-spend policies might be able to do, they won’t be able to reduce the Federal deficit – and that people never listen to history, of course…
The linked article follows up on a classic study in economics from the 1980s, which showed considerable support for the contention that every dollar of new taxes leads to more than one dollar of spending by Congress. In fact, the Vedder and Gallaway article found that for each new tax dollar, our Federal government generated $1.17 of new spending (17% more than the tax increase). The updated study is considerably more sophisticated, taking into account a much longer time period, and controlling for a range of different variables, but the alternative models suggest a tax-to-spend relationship of between $1.05 and $1.81, depending on where, when, and how the data is arranged. Nor does this pattern appear to be changing – in the years from 2008 to 2010 the present Congress has approved over $ 1 trillion, which violates all of the existing budget rules…
Now, as a political moderate, I’m not going to claim that the bailout wasn’t needed, or that we can just start slashing social programming without horrible long-term repercussions, or that our military spending is out of line with post-Cold War conditions, or any of the other standard formulae that people like to spout instead of actually wading through millions of pages of dust-dry government documents; I’m just pointing out that regardless of what you think of deficit spending (whether you’re for it or against it), our government has NEVER been able to reduce the deficit by raising taxes. It’s always possible that conditions will be different somehow this time around, but after 65 years and 13 Presidential administrations, no one has ever succeeded in doing so. Which makes the present call for things like a 6.5% national sales tax nothing more than political grandstanding…
From a business standpoint, there’s no reason to expect any member of Congress to show any fiscal responsibility, simply because there is no benefit for any of them to do so. On the contrary, the way most of our representatives continue to get elected is to bring economic advantages (e.g., jobs, entitlements, benefits and pork) to their home districts and/or states. Any member of Congress who could somehow manage to bring funds to their constituents while making somebody else pay for all of them would be elected for life, and in fact many of our longer-serving politicians have spend decades in office doing just that, or at least creating the illusion of doing so. By all indications, the problem with the current system isn’t that we aren’t being taxed enough, or even that we’re being taxed too much, but rather that our taxes are being spent on the wrong things…
Several authors have noted that deficit spending by our national government is, in effect, taking the benefits and making someone else pay for them – in this case, someone else being whoever the tax-paying public is twenty to fifty years from now. Personally, I believe that our government can dig itself out of the hole it’s currently in, by investment in industries and enterprises that will raise our tax base under existing tax law (and coincidentally create jobs, raise our standard of living, improve our trade balance, and fix our broken economy), and that might even be true. The two things that history teaches us about this issue are that whatever else tax-and-spend policies might be able to do, they won’t be able to reduce the Federal deficit – and that people never listen to history, of course…
Wednesday, November 17, 2010
Missing the Point – Yet Again
Two stories hit one of the news aggregation cites I frequent today in the “nutty lawsuits” category, which I think demonstrate why you should not take legal advice from people without law degrees – including bloggers without law degrees. I’m not going to comment on the validity of these cases (that would be the practicing law without a license I keep warning you about), but I think there are business lessons to be had in both of these instances, even if they’re not exactly the ones the authors or the people who tagged these stories as “humor” intended you to have…
First, we have the case from Alberta, Canada by way of the National Post website, about a woman who recently won a worker’s compensation case because her job caused a flare-up of an old repetitive motion injury. The job duty in question was scooping ice cream, which is an unfortunately thing to have problems with when you are employed by an ice cream shop to scoop ice cream for a living. Certainly, the people who aggregated this story thought it was an amusing case of someone trying to scam a living off of her employer without actually having to do any work. But anyone who has actually tried doing this for a living could have told them otherwise – and so could a lawyer…
Scooping a few helpings of ice cream for the family may be trivial, but having to scoop several hundred servings a day isn’t, especially when we’re talking commercial-grade ice cream, which is stored at a very low temperature to prevent spoilage. If you’ve every had to put a package of ice cream into a pot of hot water in order to get the scoop into the rock-hard surface you already know what I’m talking about; now imagine having to do this several hundred times in an 8-hour shift. Even a healthy person could easily injure herself that way, and keep in mind that she didn’t have a pot of hot water or any other way to soften the product before trying to scoop it. More to the point, perhaps, making someone who already has an old rotator cuff injury work such a shift is asinine. I’m not sure what somebody who can’t scoop would do for an ice cream shop, but there has to be some other duty you could assign such a worker, whether it’s running the register, heating up the fudge topping, or just sweeping up…
The other case comes to us from San Rafael, California, where two men are suing a restaurant because they claim they were injured and their clothing was damaged when two escargot they were eating “exploded” on them, spewing melted butter on their polo shirts and faces. The restaurant’s insurance company is refusing to pay them anything, on the grounds that having butter spill onto isn’t particularly harmful and the two diners have not produced any evidence of actually being injured or damaged in any way. Undeterred, the two butter-splashed customers are brining a case in small-claims court, where they are making a big show of representing themselves (attorneys are not allowed in small claims court in California even if they wanted one) and boasting about how they are going to “put the restaurant owner on the stand” (they can’t, and no small claims judge is going to listen to their explanations of why they should be allowed to in this case anyway). The owner is treating the whole thing as a frivolous lawsuit, and everyone in the community seems to feel that he’s right, but there’s no guarantee the court will see it that way – and even if it does, this will still be an annoying drain on his time…
You and I weren’t there when the snails exploded, so we don’t really know how the restaurant handled the incident. But if they can prove that they attempted to make things right at the time (paying for the dry-cleaning bill, offering a replacement dish) they probably can have the court case thrown out. My point here is that even if the case is ruled to be frivolous, it’s still a potentially costly waste of time and resources for the business owner, and has the potential to make the plaintiffs a laughing stock of the local community, particularly if their actions cost them their neighbors’ good opinions. It could also backfire on them, if (for example) they have businesses of their own which are suddenly struck by waves of frivolous lawsuits…
My point here being that these stories may sound humorous when you read about them in the news, but from a business standpoint, they’re not really very funny…
First, we have the case from Alberta, Canada by way of the National Post website, about a woman who recently won a worker’s compensation case because her job caused a flare-up of an old repetitive motion injury. The job duty in question was scooping ice cream, which is an unfortunately thing to have problems with when you are employed by an ice cream shop to scoop ice cream for a living. Certainly, the people who aggregated this story thought it was an amusing case of someone trying to scam a living off of her employer without actually having to do any work. But anyone who has actually tried doing this for a living could have told them otherwise – and so could a lawyer…
Scooping a few helpings of ice cream for the family may be trivial, but having to scoop several hundred servings a day isn’t, especially when we’re talking commercial-grade ice cream, which is stored at a very low temperature to prevent spoilage. If you’ve every had to put a package of ice cream into a pot of hot water in order to get the scoop into the rock-hard surface you already know what I’m talking about; now imagine having to do this several hundred times in an 8-hour shift. Even a healthy person could easily injure herself that way, and keep in mind that she didn’t have a pot of hot water or any other way to soften the product before trying to scoop it. More to the point, perhaps, making someone who already has an old rotator cuff injury work such a shift is asinine. I’m not sure what somebody who can’t scoop would do for an ice cream shop, but there has to be some other duty you could assign such a worker, whether it’s running the register, heating up the fudge topping, or just sweeping up…
The other case comes to us from San Rafael, California, where two men are suing a restaurant because they claim they were injured and their clothing was damaged when two escargot they were eating “exploded” on them, spewing melted butter on their polo shirts and faces. The restaurant’s insurance company is refusing to pay them anything, on the grounds that having butter spill onto isn’t particularly harmful and the two diners have not produced any evidence of actually being injured or damaged in any way. Undeterred, the two butter-splashed customers are brining a case in small-claims court, where they are making a big show of representing themselves (attorneys are not allowed in small claims court in California even if they wanted one) and boasting about how they are going to “put the restaurant owner on the stand” (they can’t, and no small claims judge is going to listen to their explanations of why they should be allowed to in this case anyway). The owner is treating the whole thing as a frivolous lawsuit, and everyone in the community seems to feel that he’s right, but there’s no guarantee the court will see it that way – and even if it does, this will still be an annoying drain on his time…
You and I weren’t there when the snails exploded, so we don’t really know how the restaurant handled the incident. But if they can prove that they attempted to make things right at the time (paying for the dry-cleaning bill, offering a replacement dish) they probably can have the court case thrown out. My point here is that even if the case is ruled to be frivolous, it’s still a potentially costly waste of time and resources for the business owner, and has the potential to make the plaintiffs a laughing stock of the local community, particularly if their actions cost them their neighbors’ good opinions. It could also backfire on them, if (for example) they have businesses of their own which are suddenly struck by waves of frivolous lawsuits…
My point here being that these stories may sound humorous when you read about them in the news, but from a business standpoint, they’re not really very funny…
Tuesday, November 16, 2010
Gaming the System
The other day I stumbled across a rant on the Consumerist website where someone was complaining that the new Burger King sweepstakes (they’re giving away the new “Kinect” controller for the Xbox) was recycling the same codes over and over again. For those not familiar with these games, the large drink cups you purchase as part of this promotion each have a supposedly unique code that you type into the game website to see if you’ve won anything. While you’re on the site the company running the game gets the chance to bombard you with ad copy, propaganda (in favor of their food), other offers and anything else they think might induce you to give them more money – which is the point of this exercise, of course, along with getting the customer to buy more $1.79 soft drinks that cost about three cents each. The real issue is why you would need dummy codes…
In the Burger King promotion being discussed the “prize code” is a six-digit alphanumeric, which means that six of them in sequence should yield 36 to the sixth power unique combinations, or 2,176,782,336 unique codes. It is possible that Burger King did, in fact, print that many special promotional drink cups, I suppose, although assuming that you will serve over two billion customers during the short span of the promotional period seems a bit overconfident to me. Even if they did, however, there’s no way two customers should have received the same number – unless they printed up two sets of each code, or somewhere in excess of 4.3 individual “prize code” cups. Even then, the odds of consecutive customers getting the same number should have been 2,176,782,336 to one. What seems more probable is that Burger King printed up however many winning codes actually correspond to all of the prizes they are giving away, and then filled in all of the other “prize code” cups with a few (or even just one) inert codes…
Now, one could legitimately ask what difference this makes to anybody. After all, in any corporate sweepstakes/contest of this type, 11 out of every 12 or 599 out of every 600 or 999,999 out of every million “game pieces” is going to be a dud; what difference does it make if every one of the duds has a unique code or not? That would be true if all you wanted the customers to do was collect codes or tokens or whatever (in addition to buying your product); the difficulty here is that Burger King also wants customers to go to their website and be exposed to advertising material – and nobody is going to go look up the same code they got the last three times, or which their buddy got in the previous order. Even worse, in this case, is that you can also text your code numbers to see if you’ve won anything (incurring text charges a fees, of course) – which means that Burger King is effectively telling their customers that it believes they are stupid enough to spend money verifying “prize” codes they already know are duds…
I’m not picking on Burger King here, even though the workers at my local store are so inept that they occasionally leave the top half of the bun off certain products; McDonald’s pulled a similar stunt with the “Free Entry” code for their last Monopoly™ game (it was the same code every time), and they also had to end their last iteration of the game three weeks early because they had already run out of prizes. My point here is that any sweepstakes or game is really just another advertizing gimmick, and like any other gimmick, it won’t work if it ends up costing you more in prizes, lawsuits or offended customers than you make on increased traffic, advertising sales or kickbacks from wireless service providers…
In the Burger King promotion being discussed the “prize code” is a six-digit alphanumeric, which means that six of them in sequence should yield 36 to the sixth power unique combinations, or 2,176,782,336 unique codes. It is possible that Burger King did, in fact, print that many special promotional drink cups, I suppose, although assuming that you will serve over two billion customers during the short span of the promotional period seems a bit overconfident to me. Even if they did, however, there’s no way two customers should have received the same number – unless they printed up two sets of each code, or somewhere in excess of 4.3 individual “prize code” cups. Even then, the odds of consecutive customers getting the same number should have been 2,176,782,336 to one. What seems more probable is that Burger King printed up however many winning codes actually correspond to all of the prizes they are giving away, and then filled in all of the other “prize code” cups with a few (or even just one) inert codes…
Now, one could legitimately ask what difference this makes to anybody. After all, in any corporate sweepstakes/contest of this type, 11 out of every 12 or 599 out of every 600 or 999,999 out of every million “game pieces” is going to be a dud; what difference does it make if every one of the duds has a unique code or not? That would be true if all you wanted the customers to do was collect codes or tokens or whatever (in addition to buying your product); the difficulty here is that Burger King also wants customers to go to their website and be exposed to advertising material – and nobody is going to go look up the same code they got the last three times, or which their buddy got in the previous order. Even worse, in this case, is that you can also text your code numbers to see if you’ve won anything (incurring text charges a fees, of course) – which means that Burger King is effectively telling their customers that it believes they are stupid enough to spend money verifying “prize” codes they already know are duds…
I’m not picking on Burger King here, even though the workers at my local store are so inept that they occasionally leave the top half of the bun off certain products; McDonald’s pulled a similar stunt with the “Free Entry” code for their last Monopoly™ game (it was the same code every time), and they also had to end their last iteration of the game three weeks early because they had already run out of prizes. My point here is that any sweepstakes or game is really just another advertizing gimmick, and like any other gimmick, it won’t work if it ends up costing you more in prizes, lawsuits or offended customers than you make on increased traffic, advertising sales or kickbacks from wireless service providers…
Monday, November 15, 2010
License to Blog
An article on the Business Insider web site this week was talking about bizarre government regulations, at various levels, which led me to this story on The CNN Money Page about the City of Philadelphia requiring bloggers to pay for a business license if operating within city limits. As the license is $300 (or $50 per year) and most bloggers make rather less than that (I have yet to realize any profit on this one, for example), this probably seems a little harsh. On the other hand, there are blogs that make money; there are a few of them that make quite a lot of it. The larger question is really about businesses licenses, and who should or should not pay them, and that seemed like a subject worthy of a closer look…
First off, most cities and some counties require business licenses in order to fund city operations. The logic is fairly straightforward: if your business operates within city limits, then you are benefiting from various city services (street maintenance, police and fire departments, pro-business advertising campaigns, various public works) and it’s only reasonable that you should chip in for those. Things that are regulated by the county will usually be licensed by the county government instead, such as in the case of food preparation health certificates being issued by the County Department of Health. Here again, you want the place in which your business operates to be known for food that is safe to eat (and to actually HAVE food that is safe to eat), so it’s not unreasonable to ask you to help pay for those regulatory agencies. But what if your business places no demands on city, county, or state infrastructure whatsoever?
For the most part, a blogger operating in Philadelphia has exactly the same impact on city and county services as a blogger operating on the other side of the world – which is to say, nothing. The person writing the blog might use some city services, but he or she is already contributing to the city’s finances through sales taxes, property taxes and other fees. Some cities agree with this position and don’t include bloggers in their licensing requirements, but others have pointed out that in order to be fair all municipal business laws should be applied to all businesses equally, and gone on requiring license fees. Complicating the matter still further, some pundits have suggested that blogging is protected as free speech under the First Amendment, and that applying any restrictions to it are therefore unconstitutional…
Personally, I am reminded of a client I worked with under the SBDC program who had gotten a letter from the City of Los Angeles demanding business license fees going back a decade or more, plus a ridiculous amount of penalties for non-payment all of those years. My client ran a small consulting business out of her home, and spent most of her time in the field – hence, did very little actual work in the City of L.A. The amount the City was demanding was out of reach – it was more than the business brought in over multiple years – and the letter was threatening prosecution and jail time if she didn’t pay…
I suggested that she try calling the City office (using the telephone number on the letterhead) and explaining the situation; if they could work something out it would be better for all parties involved than going to court would be. So my client made the call, explained that she hadn’t been working in the City hardly at all, and had only lived there for a few years in the first place (not the dozen or so the demand letter wanted her to pay for), and after some wrangling and arm-waving, the clerk she spoke with offered to let her purchase the appropriate license for that year (it was under $100) and pay an extra $50 or so to have the license back-dated eighteen months to cover the delinquency…
It’s not as perfect a solution as the City dropping the whole case, of course, but anytime I can shave three zeroes off the end of somebody’s bill (e.g., take it from $50,000 to $50), I always feel as if my day was not a total loss…
I don’t know how these various municipal blogging cases are going to turn out. Unless I’m very badly mistaken, these sorts of actions are going to precipitate whole new areas of case law, and it may take some time for all of the legal precedents to shake out. I just know I’m going to be very careful to check on the local ordinances if I ever decide to monetize this blog…
First off, most cities and some counties require business licenses in order to fund city operations. The logic is fairly straightforward: if your business operates within city limits, then you are benefiting from various city services (street maintenance, police and fire departments, pro-business advertising campaigns, various public works) and it’s only reasonable that you should chip in for those. Things that are regulated by the county will usually be licensed by the county government instead, such as in the case of food preparation health certificates being issued by the County Department of Health. Here again, you want the place in which your business operates to be known for food that is safe to eat (and to actually HAVE food that is safe to eat), so it’s not unreasonable to ask you to help pay for those regulatory agencies. But what if your business places no demands on city, county, or state infrastructure whatsoever?
For the most part, a blogger operating in Philadelphia has exactly the same impact on city and county services as a blogger operating on the other side of the world – which is to say, nothing. The person writing the blog might use some city services, but he or she is already contributing to the city’s finances through sales taxes, property taxes and other fees. Some cities agree with this position and don’t include bloggers in their licensing requirements, but others have pointed out that in order to be fair all municipal business laws should be applied to all businesses equally, and gone on requiring license fees. Complicating the matter still further, some pundits have suggested that blogging is protected as free speech under the First Amendment, and that applying any restrictions to it are therefore unconstitutional…
Personally, I am reminded of a client I worked with under the SBDC program who had gotten a letter from the City of Los Angeles demanding business license fees going back a decade or more, plus a ridiculous amount of penalties for non-payment all of those years. My client ran a small consulting business out of her home, and spent most of her time in the field – hence, did very little actual work in the City of L.A. The amount the City was demanding was out of reach – it was more than the business brought in over multiple years – and the letter was threatening prosecution and jail time if she didn’t pay…
I suggested that she try calling the City office (using the telephone number on the letterhead) and explaining the situation; if they could work something out it would be better for all parties involved than going to court would be. So my client made the call, explained that she hadn’t been working in the City hardly at all, and had only lived there for a few years in the first place (not the dozen or so the demand letter wanted her to pay for), and after some wrangling and arm-waving, the clerk she spoke with offered to let her purchase the appropriate license for that year (it was under $100) and pay an extra $50 or so to have the license back-dated eighteen months to cover the delinquency…
It’s not as perfect a solution as the City dropping the whole case, of course, but anytime I can shave three zeroes off the end of somebody’s bill (e.g., take it from $50,000 to $50), I always feel as if my day was not a total loss…
I don’t know how these various municipal blogging cases are going to turn out. Unless I’m very badly mistaken, these sorts of actions are going to precipitate whole new areas of case law, and it may take some time for all of the legal precedents to shake out. I just know I’m going to be very careful to check on the local ordinances if I ever decide to monetize this blog…
Friday, November 12, 2010
Spam Comments: Right or Wrong?
From time to time I’ll get a comment on this blog that doesn’t appear to belong here. Most of these are obvious advertising messages left by automated software (generically known as “spam bots”) attempting to trick the unwary into purchasing a $50 knock-off of a $500 clothing or accessory item that is actually worth less than the cost of shipping it to you – assuming that it is actually shipped to you, and they don’t just rip off your credit card information and steal your identity. It’s hard to imagine who falls for these scams in the first place, but people obviously do; even the famous “Nigerian Prince” scam nets enough new victims each month that people keep on trying it. You, my actual readers (assuming I have readers) never see any of these “ads” because Blogspot requires all comments to be moderated, and I usually just delete them as soon as they come in; any web page that is actively monitored generally does the same, destroying the vast majority of these efforts before anyone ever sees them. A much more interesting question is whether the senders have a legal right to post these things in the first place…
A recent post on the Consumerist website talks about a tool-review website that keeps getting hit with spam comments written in support of the Home Depot chain and its products, and the company’s (apparently mortified) attempts to distance themselves from these comments and deny responsibility for them. Several of the people commenting on this story mention legislation requiring bloggers to disclose their relationships to any company they write in praise of, but even if this sort of law were to be enacted, it’s hard to say how you could enforce it against bloggers or people who comment on blogs, even assuming such a law was constitutional in the first place. Certainly, there’s no legal grounds for keeping private citizens from commenting on a business or product they encounter, and there’s generally no way of telling where Internet comments are coming from in the first place…
Consider, for example, a case where a private citizen is so fond of a particular business that they visit websites, discussion boards and blogs where that business is relevant to the topics being discussed, and leave comments in praise and support of that company. The person making the comments has no financial connection or obligation to do this; they just want the company to prosper and grow, say the way I do with The Grand Traverse Pie Company . It would be hard to argue that my right to say “The Grand Traverse Pie Company is Great!” is not protected speech under the First Amendment (disclosure: I receive no financial, moral, or legal support from the Pie Company; I don’t even use their wifi to upload these posts). I like their products, and want to see them continue operations and open more locations in places convenient for my use. But suppose I had a relative who did work for the Pie Company; would this still be protected speech? Suppose it’s a close relative who might owe me money, and could conceivably pay me out of their wages; is that still free?
Now let’s suppose that an actual employee of any company goes on a few websites and leaves comments in praise of their employer. The employee is not being paid to do this; they are not using company assets or doing the postings while on the clock; they’re just telling people who might need the information about things their employer has available. Is this still a protected activity, or should it be considered advertising and regulated? For that matter, if a company starts paying people to tell potential customers about their products and services, should that be considered free speech? Does it matter if the products or services are important, hard to find, or have the potential to save lives? Or, to reverse the question, if your company makes a product that could potentially save people from unpleasant experiences (including death), should restrictions placed on advertising activities apply to your efforts to use social media to promote your business? And who gets to draw that line?
It’s a minor point, perhaps, but I call it to your attention because it’s a fact of life in our new world on the Internet. Perhaps one day all of these activities will look as quaint as the advertising methods of the early Industrial era do today, and new standards of business and behavior will have made spam comments too ham-handed and gauche for anyone to seriously consider using. A lot of that will depend, however, on how we react to these comments here and now…
A recent post on the Consumerist website talks about a tool-review website that keeps getting hit with spam comments written in support of the Home Depot chain and its products, and the company’s (apparently mortified) attempts to distance themselves from these comments and deny responsibility for them. Several of the people commenting on this story mention legislation requiring bloggers to disclose their relationships to any company they write in praise of, but even if this sort of law were to be enacted, it’s hard to say how you could enforce it against bloggers or people who comment on blogs, even assuming such a law was constitutional in the first place. Certainly, there’s no legal grounds for keeping private citizens from commenting on a business or product they encounter, and there’s generally no way of telling where Internet comments are coming from in the first place…
Consider, for example, a case where a private citizen is so fond of a particular business that they visit websites, discussion boards and blogs where that business is relevant to the topics being discussed, and leave comments in praise and support of that company. The person making the comments has no financial connection or obligation to do this; they just want the company to prosper and grow, say the way I do with The Grand Traverse Pie Company . It would be hard to argue that my right to say “The Grand Traverse Pie Company is Great!” is not protected speech under the First Amendment (disclosure: I receive no financial, moral, or legal support from the Pie Company; I don’t even use their wifi to upload these posts). I like their products, and want to see them continue operations and open more locations in places convenient for my use. But suppose I had a relative who did work for the Pie Company; would this still be protected speech? Suppose it’s a close relative who might owe me money, and could conceivably pay me out of their wages; is that still free?
Now let’s suppose that an actual employee of any company goes on a few websites and leaves comments in praise of their employer. The employee is not being paid to do this; they are not using company assets or doing the postings while on the clock; they’re just telling people who might need the information about things their employer has available. Is this still a protected activity, or should it be considered advertising and regulated? For that matter, if a company starts paying people to tell potential customers about their products and services, should that be considered free speech? Does it matter if the products or services are important, hard to find, or have the potential to save lives? Or, to reverse the question, if your company makes a product that could potentially save people from unpleasant experiences (including death), should restrictions placed on advertising activities apply to your efforts to use social media to promote your business? And who gets to draw that line?
It’s a minor point, perhaps, but I call it to your attention because it’s a fact of life in our new world on the Internet. Perhaps one day all of these activities will look as quaint as the advertising methods of the early Industrial era do today, and new standards of business and behavior will have made spam comments too ham-handed and gauche for anyone to seriously consider using. A lot of that will depend, however, on how we react to these comments here and now…
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