Now assume that the resort desires to create an alliance with an insurer perhaps offering travel insurance when guests book a reservation or another participant in a regulated industry. The promotion and sale of insurance is regulated to varying degrees by every state, and there is no overarching federal regulation. The online insurer, in contrast, would probably need to be licensed in every state in which it offers the insurance product, or limit its ability to sell in any states in which it is not licensed. Unfortunately, the answer is likely to differ from state to state. The privacy of data collected on the Internet and the sharing of that data have become primary areas of focus for state and federal lawmakers and regulators.
Privacy issues are often particularly problematic for e-commerce alliances.
If a business violates its posted privacy policy, it faces the threat of consumer litigation or enforcement actions by the FTC and other governmental agencies. If a business does not take reasonable care to assure that its alliance partner upholds the same standards with regard to shared data, then it could find itself accused of violating its privacy policy based on the actions of one of its partners. Many alliance partners wish to preserve the competitive advantage gained by teaming up with another online business by requiring exclusivity. This may not be the case, of course, with vertical aggregators, where the purpose may be to encourage competition in an industry, such as through an auction process. Because many online businesses are themselves an aggregation of a variety of products and services, it is becoming increasingly complex and unwise to agree to broad exclusivity clauses.