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The explosive growth of the Internet and the development of e-commerce have created important and difficult issues for economics, policy, and law. The Internet has made possible new products, business methods, and markets. In addition, conventional businesses have used the potential of the Internet to gain customers and business partners.

Although the Internet has created new methods of commercial interaction, the old problems of the commercial world persist for e-commerce. For example, firms need to protect their intellectual property in developing Internet sites, but the appropriate protection for such property, and even its definition, must be analyzed in the context of the freedom of the Internet. Additionally, as e-commerce has matured, businesses have begun to interfere with one another, and dominant firms may engage in anticompetitive activity to protect and expand their market share. As in other high-tech industries, tension has developed between protecting intellectual property and protecting the policies underlying the antitrust laws.

AEP has been involved in a number of cases that have confronted these issues. By considering the economic impact and incentives of policies underlying both traditional commerce and the Internet, our analyses have created an appropriate framework for adapting existing laws to, and proposing more efficient rules for, commercial interactions on the Internet.

An Internet firm developed technology allowing users to search and browse a database of items offered for auction at a number of Web-based auction sites. The database was compiled through searching auction sites much like general search engines search the entire World Wide Web. Although the aggregator did not actually host auctions, and required users to go to the actual auction hosts to place specific bids, the major Internet auction host sued to prevent searching its site and listing those items available for auction. The defendant filed an antitrust action in reply. AEP performed a cost-benefit analysis of the issues that considered the effect on the parties, the Internet auction market, e-commerce, and the development of the Internet as a whole if the auction host's claims were to prevail.