Businesses can change identities at very low cost. Consumers have less ability to monitor on-line businesses' compliance with stated commercial policies than to monitor businesses tied to physical stores at known street addresses. Consumers have little, if any, ability to monitor businesses' compliance with posted privacy policies. The FTC and DOJ have overwhelming proof of consumers' inability to protect themselves from even traditional merchants. Reputable firms, furthermore, need protection from reputation free riders.
Reputation costs money to earn and to advertise.
Because of low entry costs and the ease of online masquerade, consumers doubt their ability to trust what they read on the Internet. Consumer distrust means that businesses' advertising money is partly wasted. Individual consumers generally cannot afford these costs. Businesses have the best ability to spread these costs over multiple transactions and through trade associations. Sales or licenses of intellectual property are beyond the scope of this comment.