Nancy E. Ellis
WEBdispute.com

P.O. Box 675
Mount Sinai, New York 11766\

June 29, 2000

Mr. Donald Clark, Secretary
Federal Trade Commission
Room H-159
600 Pennsylvania Ave. N.W.
Washington, D.C. 20850

Re: Post Workshop Reply - Alternative Dispute Resolution for Consumer Transactions in the Borderless Online Marketplace

Dear Mr. Clark,

Thank you so much for inviting me to participate in the June 6/7 workshop on Alternative Dispute Resolution for Consumer Transactions in the Borderless Online Marketplace. It was very informative and presented a wide array of opinions on a very complex issue. I think that the information shared by all panelists was very valuable, and I would like to be included in any future programs on this topic offered by your agency.

Several distinct themes emerged during this workshop. The most prevalent of course, was the need to protect consumers on the World Wide Web while building consumer confidence in e-commerce transactions. The notion of caveat emptor has re-emerged as an important concept when dealing with the global nature of e-commerce transactions. Alternative dispute resolution (or on-line dispute resolution) is recognized as having potential and will no-doubt have a vital role in the future of e-commerce. However, as discussed at the workshop, there is no isolated solution; each must be combined with other initiatives as summarized below:

Protecting Consumers On-line

Consumer Education
Dispute Avoidance		 Guidelines and standards for reputable business practices publicized. Consumers provided with information about the cautions of on-line transactions and the nature of resolving disputes. The best consumer is an educated consumer. In the on-line arena, an ounce of prevention is worth a pound of cure.
Quality Businesses -
* Self Regulation
* Government recognized quality "seal."		 Businesses develop internal consumer complaint resolution mechanisms - businesses that comply are awarded a quality seal to post on their web-site
On-line Mediation -
*Public or private sector
*May use artificial intelligence		 For disputes that cannot be resolved using business internal mechanism, disputes are mediated by a recognized external entity.
On-line Arbitration - mandatory/non-binding For disputes that cannot be resolved using mediation. The parties would be required to have their case heard by an on-line arbitrator.
International On-line Small Offers a binding forum for the resolution of
International enforceability of settlements and awards. Multinational government sponsored enforcement mechanism to ensure award compliance.

It is apparent from the workshop discussions that there is not one easy solution to the reconciliation of on-line consumer disputes. However, the ideas brought out at the forum, as outlined above, provide a vital framework where most, if not all, disputes could be resolved.

I am a little concerned about the issue of cost and funding. The e-commerce dispute resolution infrastructure has not yet been fully developed and will no-doubt be costly. Mr. Stevenson pointed out at the workshop that "there are no free lunches." I would be very cautious of any business or organization (without government sponsorship) that can claim to handle this major problem for free or on a pro-bono basis. The magnitude of consumer complaints is extensive. Even though the dollar amount in controversy for a particular dispute may be very small, when consumers feel that they are being taken advantage of they tend to get very emotional. The resolution of a consumer complaint can be very labor intensive and time consuming. I am not sure who should bear the cost of this mechanism or how costs should be allocated.

Thank you again for providing such an important workshop and for establishing a valuable dialogue on an important subject. Please contact me if you require any additional information or if I can be of any other assistance.

Sincerely,

Nancy Ellis
WEBdispute.com