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Chapter 15 Legal & Ethical Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 2 OBJECTIVES Ethical Issues –What is Ethics? –Major Threats –Improving the Climate –Code of Ethics –Self-Assessment –Privacy Factor Legal Issues –Liability Question –Basis of Liability –Copyrights & Trademarks –Website – Product / Service? –Warranties –Strict Liability –Taxation Issues Legal & Ethical Issues: Objectives
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 3 WHAT IS ETHICS? Legal & Ethical Issues: Ethical Issues Fairness, justice, equity, honesty, trustworthiness & equality Subjective B D C A Legal ImmoralMoral Illegal
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 4 MAJOR THREATS Faster computers & networks Sophisticated telecommunications & routers Massive distributed databases Ease of access to information & knowledge base Transparency of software Legal & Ethical Issues: Ethical Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 5 IMPROVING THE CLIMATE Top management support Code of ethics Ethics training program Motivation to focus on honesty & integrity Legal & Ethical Issues: Ethical Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 6 WHERE TO START Bottom-up –Inculcates ethics behavior at the employee level with full support of top management Top-down –The actions of the company start with the CEO –Extend to a variety of stakeholders Legal & Ethical Issues: Ethical Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 7 CODE OF ETHICS A declaration of principles and beliefs that govern how employees of a corporation are to behave Inspirational & disciplinary All-compassing & stable over time Legal & Ethical Issues: Ethical Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 8 SELF-ASSESSMENT A question-and-answer procedure Allows individuals to appraise & understand their personal knowledge about a particular topic An educational experience Legal & Ethical Issues: Ethical Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 9 PRIVACY FACTOR Notice –Right to be told in advance Choice –Final say regarding the use of personal info Access –Access & correct any personal info Security/integrity Enforcement –Backed by the courts if any principles are violated Legal & Ethical Issues: Ethical Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 10 THE LIABILITY QUESTION Liability of Designer –Nontrivial errors –Out-of-bound errors Liability of User –Passive negligence Basis of Liability –Tort law –Product liability Legal & Ethical Issues: Legal Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 11 TORT LAWS ON INTERNET Settling contract problems between e-merchants & ISP Fraud – intent to deceive Negligence – failing to make certain action causing injury / material losses False advertising Misrepresentation – claiming a product will perform certain functions when it could not Trademark violations – under intellectual property law Legal & Ethical Issues: Legal Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 12 COPYRIGHT Copyrights –Ownership of an original work created by an author –A form of intellectual property protection covers the look & feel and content of printed media –Gives author the right to exclude others from using the finished work –Good for life of its author + 70 years Legal & Ethical Issues: Legal Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 13 TRADEMARK / TRADE NAME A word / symbol distinguishing one good from other goods in the market A maze of federal & state laws Web designer – work made for hire Legal & Ethical Issues: Legal Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 14 WEBSITE – PRODUCT/SERVICE? Product –Software sold off the shelf –Uniform Commercial Code (UCC) allows developer to limit liability for defective websites though a disclaimer of warranties Service –Custom-designed software –Negligence principles should be used Legal & Ethical Issues: Legal Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 15 WARRANTIES Assurance made by seller about the goods sold Express warranty –Offered orally or in writing by maker of products Implied warranty –Arises automatically when a sale is made –Merchantability Disclaimer –Sellers intention to protect the business from unwanted liability Legal & Ethical Issues: Legal Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 16 STRICT LIABILITY Joint & several liability for developers, manufacturers & distributors if tort theory applies Protects web visitor regardless of whether anyone is at fault Legal & Ethical Issues: Legal Issues
Awad –Electronic Commerce 1/e © 2002 Prentice Hall 17 TAXATION ISSUES Controversial –Different jurisdiction –Consumers reaction Legal & Ethical Issues: Legal Issues
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