[Update 4/27—This posting has generated an unusually vigorous and enlightening discussion in the Comments section. Recommended reading.]
Several months ago, Eugene posted [here] an article that he and Jack Goldsmith had written for the Texas Law Review regarding the Dormant Commerce Clause and its application to State regulation of online activities. [The final version, in the Texas Law Review, is available here] "The constitutionality of such State regulation," they argue, "should generally turn on the feasibility of geolocation—the extent to which web sites or other Internet services can determine, reliably and inexpensively, which states users are coming from." Their argument goes something like this:
- In the Internet's early days—1995 or thereabouts—websites and other online businesses were unable, as a practical matter, with reasonable accuracy at reasonable cost, to determine user location.
- Therefore, requiring websites and other online businesses to "apply the proper state law to each user"—to treat Iowans (and transactions within Iowa) as Iowa law requires them to be treated, Floridians (and transactions within Florida) as Florida law requires them to be treated, etc.—would have imposed an enormous burden on those businesses.
- The Dormant Commerce Clause jurisprudence of the time recognized this. Many attempts by States to enforce their laws against out-of-state websites were accordingly struck down as impermissibly burdensome on interstate commerce, in significant part because of these difficulties of determining user location.
- But that condition no longer holds. "Geolocation has become feasible in recent years, and is routinely used by major web sites for ordinary business purposes."
- Thus there is now "more constitutional room for state regulation of Internet services, including social media platforms, than often believed."
