1. Hollywood Retreats

The entertainment industry thought it had bought enough politicians, plus foolish support by GoDaddy (now retracted), to ram through SOPA/PIPA legislation. Pretending to be about property rights, this horrible legislation would cripple ecommerce while allowing politicians in power to crush free speech online.

Now that Google, Amazon, Facebook, etc. are fighting back, together with civil rights groups and social media, it looks like Hollywood will retrench and regroup until after the November 2012 elections. This battle isn’t over by a long shot. Look for the entertainment industry to try one last shot to push through SOPA/PIPA when Congress critters return to D.C. More lipstick will be put on this legislative pig and it will come back in 2013 under a different name (Protect the Children Act, Save the Puppies Act, Don’t Starve Grandma Act, etc.) designed to create more sympathy.

Let’s hope large ecommerce sites continue to fight and GoDaddy has learned its lesson.

2. Privacy Changes

As Congress deadlocks on Internet privacy legislation, look for the Federal Trade Commission (FTC) to move forward with additional regulatory protection for children. Either in 2012 or the following year, look for bans or severe restrictions on GPS tracking of children by smart phone apps.

In the meantime, the private sector will come up with additional ways to both protect and circumvent Internet privacy. Whatever comes out of Washington will be obsolete before it becomes law.

3. New Biz Opp Disclosure Requirements Ignored

Effective March 1, 2012, there are new FTC biz opp/work-at-home disclosure requirements. Expect most Internet marketers to ignore this requirement. Some will make disclosures that contain misleading information designed to fool consumers. Few will get caught. The FTC will grab some headlines by suing and confiscating assets of a couple of the really bad apples.

4. Internet Sales Taxes Move Forward

The Federal “main street fairness” Internet sales tax legislation will have the support of both Wal-Mart and Amazon. Expect crony capitalists at the U.S. Chamber of Commerce to jump on the bandwagon.

Broke states (California, Illinois, etc.) will push heavily for a federal Internet sales tax on the mistaken assumption they will receive a chunk of the tax money from D.C.

The primary advantage that small business website owners have is that the November 2012 elections provide no incentive for the Republican House and the Democrat Senate to cooperate on agreeing to the time of day or anything else. Plus, there seem to be few Republicans in either house that want to face their constituents to defend imposing a new tax in the middle of an economic recession.

5. Want to bet?

It looks like the U.S. Department of Justice is rethinking its use of a 1961 law to arrest and prosecute the owners of Internet gambling sites. Expect broke state governments to push heavily for legalization of intra-state Internet gambling. In other words, these state governments are going to want the federal government to permit gambling sites to be licensed on a state-by-state basis for gambling only by residents within the one state where each site is licensed.

It remains to be seen whether traditional offline gambling interests will support or oppose such plans. Some of the major U.S. casino companies are already investing in joint ventures with European gambling sites with the expectation of rolling out U.S.-based sites once they become legal.

6. Denial of Service

In the interest of “homeland security,” the U.S. government will continue to arbitrarily shut down websites without affording due process in court. There will not be a backlash until the government overreaches and shuts down a social media website that has political backers on Capitol Hill willing to subpoena and grill those involved.

7. Icann of .Coke

The FTC will continue to pressure Internet Corporation for Assigned Names and Numbers (ICANN) about the foolish decision to sell .brands generic top level domain extensions for six figures. If ICANN proceeds, expect a wave of lawsuits to swamp the courts as Competitor A buys the .CompetitorB extension to steal traffic away from Competitor B.

…Wishing you the best in the coming year. Let’s hope the politicians don’t muck up ecommerce for small business owners. Congress doesn’t understand the Internet so it should just stay on the sidelines instead of ruining it for the rest of us.