Chapter 08 - Current and Ethical Issues

7/24/2019 Chapter 08 - Current and Ethical Issues

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Copyright 2009 Pearson Education, Inc. Publishing as Prentice HallCopyright 2009 Pearson Education, Inc. Slide 8-1

E-commerce

Kenneth C. Laudon

Carol Guercio Traver

business. technology. society.

Fifth Edition


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Copyright 2009 Pearson Education, Inc. Publishing as Prentice HallCopyright 2009 Pearson Education, Inc. Slide 8-2

Chapter 7

Ethical, Social, and Political Issues

in E-commerce


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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Second Life Gets a Life: Discovering Law

and Ethics in Virtual WorldsClass Discussion

Why is mischief in virtual worlds more difficult to

stop? What constitutes mischief in Second Life?

Which behaviors have been banned in Second Life?

Is there a consensus regarding whether or not in-

game gambling and other virtual crimes are also

actual crimes? What is Second Lifes stance?

ow faithfully do you believe the law should be

enforced in virtual worlds?

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!nderstanding Ethical" Social" and

#olitical $ssues in E-co%%erce Internet technology and its use in

e-commerce disrupts e!isting social and

business relationships and understandings "osts and benefits of technology must be

carefully considered# especially when there

are as yet no clear-cut legal or cultural

guidelines

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' (odel for )rgani*ing the $ssues

Issues raised by Internet and e-commerce canbe viewed at individual# social# and political

levels

$our ma%or categories of issues& Information rights 'roperty rights

(overnance

'ublic safety and welfare

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,he (oral Di%ensions of an $nternet

SocietFigure 8., Page !8"

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7/44Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

/asic Ethical Conce0ts

)thics Study of principles used to determine right and wrong

courses of action

*esponsibility

+ccountability

Liability Laws permitting individuals to recover damages

,ue process Laws are nown# understood

+bility to appeal to higher authorities to ensure laws

applied correctly

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Candidate Ethical #rinci0les

Well-established ethical principles can be usedto help determine actions when confronted withan ethical dilemma&

(olden *ule

6niversalism

Slippery Slope

"ollective 6tilitarian 'rinciple

*is +version 7o $ree Lunch

8he New York Times8est 9'erfect Information *ule:

8he Social "ontract *uleSlide 8-



#rivac

'rivacy& ;oral right of individuals to be left alone# free from

surveillance or interference from other individuals

or organi.ations

Information privacy& Includes both the claim that certain information

should not be collected at all# as well as the claim

of individuals to control the use of whatever

information is collected about them

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E-co%%erce and #rivac

;a%or ethical issue related to e-commerceand privacy& 6nder what conditions should we invade privacy of

others?

;a%or social issue& ,evelopment of e!pectations of privacy and

privacy norms

;a%or political issue& ,evelopment of statutes that govern relations

between recordeepers and individuals

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$nfor%ation Collected at E-co%%erce

Sites 'ersonally identifiable information 9'II:&

,ata that can be used to identify# locate# or contact an

individual+nonymous information&

,emographic and behavioral information that does

not include any personal identifiers+lmost all e-commerce companies collect 'II

and use cooies to trac clicstream behavior

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#rofiling and /ehavioral ,argeting

'rofiling "reation of digital images that characteri.e online individual and

group behavior

+nonymous profiles

Identify people as belonging to very specific and targeted groups 'ersonal profiles&

+dd personal identifiers

+dvertising networs can&

8rac consumer behavior and browsing behavior on the Web

,ynamically ad%ust what user sees on screen



#rofiling and /ehavioral ,argeting

4cont5d6 ,eep pacet inspection

*ecords every eystroe at IS' level of everyone and uses

information to mae suggestions# target ads

Weblining& "harging some customers more for products based on profiles

7etwor advertising firms& Web profiling serves consumers and businesses

"ritics& 'rofiling undermines e!pectation of anonymity and privacy

"onsumers& Significant opposition to unregulated collection of personal

information

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,he $nternet and Govern%ent

$nvasions of #rivac =arious laws strengthen ability of law

enforcement agencies to monitor Internet users

without nowledge and sometimes without%udicial oversight "+L)+# '+8*I>8 +ct# "yber Security )nhancement

+ct# omeland Security +ct

(overnment agencies are largest users ofprivate sector commercial data broers

*etention by IS's of user data a concern

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Legal #rotections

;ay be e!plicitly granted or derived fromconstitutions 960S0# "anada# (ermany:

;ay also be found in common law 960S#

)ngland:

In 60S# also found in federal and state laws

and regulations $irst amendment guarantees freedom of speech

and association $ourth amendment protects against

unreasonable search and sei.ure

$ourteenth amendment guarantees due process

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$nfor%ed Consent

"onsent given with nowledge of all thematerial facts needed to mae a rationaldecision

8wo models&

>pt-in

>pt-out

;any 60S0 e-commerce firms merely publish

information practices as part of privacy policywithout providing for any form of informedconsent

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,he 7,C5s 7air $nfor%ation #ractices

#rinci0les 60S0 $ederal 8rade "ommission&

"onducts research and recommends legislation to"ongress

$8" $air Information 'ractice 'rinciples9/@@A:& 7oticeB+wareness 9"ore: "hoiceB"onsent 9"ore:+ccessB'articipation Security )nforcement

(uidelines# not laws

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7,C5s 7air $nfor%ation #ractice

#rinci0les

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#otice$%&areness Sites must disclose information practices before collecting data0Includes identification of collector# uses of data# other recipients ofdata# nature of collection 9activeBinactive:# voluntary or re5uired#conse5uences of refusal# and steps taen to protect confidentiality#integrity# and 5uality of the data

Choice$Consent 8here must be a choice regime in place allowing consumers to choosehow their information will be used for secondary purposes other thansupporting the transaction# including internal use and transfer to thirdparties0 >pt-inB>pt-out must be available0

%ccess$Partici'ation "onsumers should be able to review and contest the accuracy andcompleteness of data collected about them in a timely# ine!pensiveprocess0

Securit( ,ata collectors must tae reasonable steps to assure that consumerinformation is accurate and secure from unauthori.ed use0

En)orcement 8here must be in place a mechanism to enforce $I'principles0 8his can involve self-regulation# legislation givingconsumers legal remedies for violations# or federal statutes andregulation0



7,C eco%%endations egarding

)nline #rofiling

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Princi'le *ecommendation

#otice "omplete transparency to user by providing disclosure and choiceoptions on the host Web site0 *obust notice for 'II 9timeBplace ofcollectionC before collection begins:0 "lear and conspicuous noticefor non-'II0

Choice >pt-in for 'II# opt-out for non-'II0 7o conversion of non-'II to 'IIwithout consent0 >pt-out from any or all networ advertisers from asingle page provided by the host Web site0

%ccess *easonable provisions to allow inspection and correction0

Securit( *easonable efforts to secure information from loss# misuse# or

improper access0

En)orcement ,one by independent third parties# such as seal programs andaccounting firms0

*estrictedCollection

+dvertising networs will not collect information about sensitivefinancial or medical topics# se!ual behavior or se!ual orientation#or use Social Security numbers for profiling0



,he Euro0ean Directive on Data

#rotection 'rivacy protection much stronger in )urope

than in 6nited States )uropean approach& "omprehensive and

regulatory in nature )uropean "ommissions ,irective on ,ata

'rotection& Standardi.es and broadensprivacy protection in )uropean 6nioncountries

,epartment of "ommerce safe harborprogram for 60S0 firms that wish to complywith ,irective

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#rivate $ndustr Self-egulation

Safe harbor& 'rivate# self-regulating policy and enforcement

mechanism that meets ob%ectives of governmentregulations and legislation# but does not involvegovernment regulation or enforcement

e0g0 'rivacy seal programs 98*6S8e#


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Insight on Business

Chief #rivac )fficersClass Discussion

What does a "hief 'rivacy >fficer do? Why do corporations need a "'>?

What is a privacy audit? Why did "hoice'oint hire a "'>? ow do federal laws lie (raham-Leach


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,echnological Solutions to #rivac

$nvasion on the We9 Spyware# cooie# pop-up blocers

'latform for 'rivacy 'references 9'2':&

"omprehensive technological privacy protection effortsponsored by W2"

Standard for communicating to users a Web sitesprivacy policy

"ompares site policy to users preferences or to otherstandards such as $8"s $I' guidelines or )6s ,ata'rotection ,irective

Wors through users Web browser

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ow ## Wor;sFigure 8.+%, Page

Slide 8-2+S/0*CE1 23C Plat)orm )or Privac( Pre)erences Initiative, +443.


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$nternetE


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Insight on Technology

,he #rivac ,ug of War:'dvertisers Vs= Consu%ers

Class Discussion

What are some of the technologies being used to

invade privacy? What are some of the technologies being used to

protect privacy?

,o you accept the trade off between privacyinvasion and free Web content?

,o consumers support the idea of giving up

personal information in return for free content?

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$ntellectual #ro0ert ights

Intellectual property& )ncompasses all tangible and intangible products of

human mind

;a%or ethical issue&

ow should we treat property that belongs to others?

;a%or social issue&

Is there continued value in protecting intellectual

property in the Internet age? ;a%or political issue&

ow can Internet and e-commerce be regulated orgoverned to protect intellectual property?

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,0es of $ntellectual #ro0ert

#rotection 8hree main types of intellectual property

protection& "opyright

'atent 8rademar law

8he goal of intellectual property law is to balance

two competing interestsDthe public and the

private

;aintaining this balance of interests is always

challenged by the invention of new technologies

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Co0right: ,he #ro9le% of #erfect

Co0ies and Encr0tion "opyright law& 'rotects original forms of e!pression 9but

not ideas: from being copied by others for a period oftime

Loo and feel copyright infringement lawsuits involvedistinction between an idea and its e!pression

$air use doctrine& 6nder certain circumstances# permitsuse of copyrighted materials without permission

,igital ;illennium "opyright +ct of /@@A 9,;"+:& $irstma%or effort to ad%ust copyright laws to Internet age

,;"+ implements WI'> treaty that maes it illegal to mae#distribute# or use devices that circumvent technology-basedprotections of copyrighted materials

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#atents: /usiness (ethods and

#rocesses 'atents& (rants owner a 1E-year e!clusive

monopoly on ideas behind an invention

;achines# man-made products# compositions ofmatter# processing methods

Invention must be new# non-obvious# novel

)ncourage inventors

Stifle competition by raising barriers to entry

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E-co%%erce #atents


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$nternet and E-co%%erce /usiness

(ethod #atentsFigure 8.3, Page +3

Slide 8-S/0*CE1 0nited States Patent and Trademar6 /))ice, +448


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#atent efor%

'atent trolls companies that collect patentsand see to enforce them

1EEF ouse of *epresentatives patent reform

bill "hange patent system from first to invent to first to

file

7ew calculations for damages

Way to challenge out of court

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,rade%ar;s: )nline $nfringe%ent

and Dilution 8rademar&

;ar used to identify and distinguish goods# and indicatetheir source

'rotects public by ensuring it gets what it paysforBe!pects to receive

'rotects trademar owner against piracy andmisappropriation

Infringement& 6se of trademar that "reates confusion with e!isting mars# causes

consumers to mae maret mistaes# or

;isrepresents origins of goods

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,rade%ar;s: )nline $nfringe%ent

and Dilution 4cont5d6 ,ilution& +ny behavior that weaens the

connection between trademar and product

$ederal 8rademar ,ilution +ct 9/@@4: )!tends protection to owners of famous trademars

against dilution

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,rade%ar;s and the $nternet

"ybers5uatting& *egistration of domain name or otherInternet use of e!isting trademar for purpose of e!tortingpayments from legitimate owners

"yberpiracy& Same behavior as cybers5uatting# with intent ofdiverting traffic from legitimate site to infringing site

;etatagging& 6sing others trademars as metatags inmisleading or confusing manner

Geywording& 6sing others trademars as eywords onsearch engines in a misleading or confusing manner

,eep lining&


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Governance

Involves issue of social control 'rimary 5uestions&

Who will control Internet and e-commerce? What elements will be controlled and how?

Stages of governance and e-commerce (overnment "ontrol 'eriod 9/@FE/@@3: 'rivati.ation 9/@@4/@@A: Self-*egulation 9/@@4present: (overnment *egulation 9/@@Apresent:

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Who Governs E-co%%erce and the

$nternet> "urrently in a mi!ed mode policy environment where

self-regulation# through variety of Internet policy and

technical bodies# co-e!ists with limited government

regulation I"+77

60S0 government vs0 I86

7ot true that Internet cannot be controlled0 In fact#Internet can be very easily controlled# monitored# and

regulated from a central location 9such as done by

"hina# Singapore# etc0:

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,actober 1EEF& "ongress e!tended ta! moratorium onmultiple or discriminatory ta!es on electronic commercefor an additional seven years

6nliely that comprehensive# integrated rational approach

to ta!ation issue will be determined for some time to come

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?et ?eutralit

"urrently# all Internet traffic treated e5ually allactivities charged the same rate# no preferential

assignment of bandwidth

Internet bacbone providers would lie to chargedifferentiated prices and ration bandwidth by

pricing or speed 9bandwidth controls:

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#u9lic Safet and Welfare

'rotection of children and strong sentimentsagainst pornography 'assing legislation that will survive court

challenges has proved difficult& "ommunications ,ecency +ct struc down "hildrens >nline 'rotection +ct struc down 9but still be

considered by lower courts: "hildrens Internet 'rotection +ct upheld by Supreme

"ourt 9re5uires schools and libraries to install technologyprotection measures:

)fforts to control gambling and restrict salesof drugs and cigarettes "urrently mostly regulated by state law 6nlawful Internet (ambling )nforcement +ct

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Insight on Society

,he $nternet Drug /a*aarClass Discussion

Whats wrong with buying prescription drugs online#especially if the prices are lower?

What are the riss and benefits of online pharmacies? Should online pharmacies re5uire a physicians

prescription?

ow do online pharmacies challenge the traditional

business model of pharmacies and drug firms? Why hasnt effective federal legislation been adopted?

Who benefits and who loses from online pharmacies?

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permission of the publisher0 'rinted in the 6nited States of +merica0

Copyright 2009 Pearson Education, Inc.Copyright 2009 Pearson Education, Inc.

Publishing as Prentice HallPublishing as Prentice Hall

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Chapter 08 - Current and Ethical Issues