Government remains, of course, a player in the online market by virtue of consumer power and transactional standards setting. However, the electronic commerce market will not be regulated or legislated into existence, but it will emerge as a result of supply and demand. As the market develops, legislation or regulation can be crafted to deal specifically with market failures that may emerge with respect to consumers, corporate market needs, criminality and other public concerns. To attempt to legislate solutions to problems that have largely not yet happened in a market that is still not fully formed risks harmful market distortions and other unintended consequences. It is clear, however, that certain legislative reforms will be needed to remove legal obstacles from the path of private sector parties who use electronic commerce as part of their business.
Some legal reforms are largely under the jurisdictions of the states.
For instance, the law of contracts has traditionally been a matter for state law. Similarly, the specific question of electronic authentication often boils down to an issue of evidence. This is an issue of proof of the identity of a party to a transaction or other online activity. To the extent these matters are tried in state courts applying state rules of evidence, this too is a matter of state law. State courts have, for centuries, proven to be quite capable of adjudicating commercial disputes between parties from multiple jurisdictions and dealing with technological advances.