Copyright © 2002 Pearson Education, Inc.

Ethical, Social, and Political Issues in E-commerce CHAPTER 9 Ethical, Social, and Political Issues in E-commerce Created by, David Zolzer, Northwestern State University—Louisiana Copyright © 2002 Pearson Education, Inc.

Learning Objectives Understand why e-commerce raises ethical, social, and political issues Recognize the main ethical, social, and political issues raised by e-commerce Identify a process for analyzing ethical dilemmas Identify the practices of e-commerce companies that threaten privacy Understand basic concepts related to privacy Copyright © 2002 Pearson Education, Inc.

Learning Objectives Describe the different methods used to protect online privacy Understand the various forms of intellectual property and the challenge of protecting it Understand how governance of the Internet has evolved over time Explain why taxation of e-commerce raises governance and jurisdiction issues Identify major public safety and welfare issues raised by e-commerce Copyright © 2002 Pearson Education, Inc.

Unique Features of E-commerce Technology and Their Potential Ethical, Social, and/or Political Implications Page 456, Table 9.1 Copyright © 2002 Pearson Education, Inc.

Ethical, Social, and Political Issues Information Rights What rights to their own personal information do individuals have in a public marketplace, or in their private homes, when Internet technology makes information collection so pervasive and efficient? What rights do individuals have to access information about business firms and other organizations? Copyright © 2002 Pearson Education, Inc.

Ethical, Social, and Political Issues Property Rights How can traditional intellectual property rights be enforced in the Internet world where perfect copies of protected works can be made and easily distributed worldwide in seconds? Governance Should the Internet and e-commerce be subject to public laws? If so, what law-making bodies have jurisdiction -- state, federal, and/or international? Copyright © 2002 Pearson Education, Inc.

Ethical, Social, and Political Issues Public Safety and Welfare What efforts should be undertaken to ensure equitable access to the Internet and e-commerce channels? Should governments be responsible for ensuring that schools and colleges have access to the Internet? Is certain online content and activities -- such as pornography and gambling -- a threat to public safety and welfare? Should mobile commerce be allowed from moving vehicles? Copyright © 2002 Pearson Education, Inc.

The Moral Dimensions of an Internet Society Page 458, Figure 9.1 Copyright © 2002 Pearson Education, Inc.

Basic Ethical Concepts Ethics is the study of principles that individuals and organizations can use to determine right and wrong courses of action Responsibility means that as free moral agents, individuals, organizations, and societies are responsible for the actions they take Copyright © 2002 Pearson Education, Inc.

Basic Ethical Concepts Accountability means that individuals, organizations, and societies should be held accountable to other for the consequences of their actions Liability is a feature of political systems in which a body of law is in place that permits individuals to recover the damages done to them by other actors, systems, or organizations Copyright © 2002 Pearson Education, Inc.

Basic Ethical Concepts Due process is a feature of law-governed societies and refers to a process in which laws are known and understood and there is an ability to appeal to higher authorities to ensure that laws have been applied correctly Copyright © 2002 Pearson Education, Inc.

Analyzing Ethical Dilemmas Dilemma is a situation is which there are at least two diametrically opposed actions, each of which supports a desirable outcome Use a five-step process to analyze a dilemma Copyright © 2002 Pearson Education, Inc.

Analyzing Ethical Dilemmas Identify and describe clearly the facts Find out who did what to whom, and where, when, and how. Define the conflict or dilemma and identify the higher-order values Ethical, social, and political issues always reference higher values The parties to a dispute all claim to be pursuing higher values Copyright © 2002 Pearson Education, Inc.

Analyzing Ethical Dilemmas Identify the stakeholders Every ethical, social, and political issues has stakeholders: players in the game who have an interest in the outcome, who have invested in the situation, and usually have vocal opinions Find out the identity of these groups and what they want Copyright © 2002 Pearson Education, Inc.

Analyzing Ethical Dilemmas Identify the options that you can reasonably take None of the options may satisfy all interests involved Some options do a better job than others Arriving at a “good” or ethical solution may not always be a balancing of consequences to stakeholders Copyright © 2002 Pearson Education, Inc.

Candidate Ethical Principles The Golden Rule Do unto others as you would have them do unto you. Putting yourself in place of others and thinking of yourself as the object of the decision can help you think about fairness in decision making Copyright © 2002 Pearson Education, Inc.

Candidate Ethical Principles Universalism If an action is not right for all situations, then it is not right for any specific situation Ask yourself, “If we adapted this rule in every case, could the organization, or society, survive?” Copyright © 2002 Pearson Education, Inc.

Candidate Ethical Principles Slippery Slopes If an action cannot be taken repeatedly, then it is not right to take at all An action may appear to work in one instance to solve a problem, but if repeated, would result is a negative outcome “Once started down a slippery path, you may not be able to stop.” Copyright © 2002 Pearson Education, Inc.

Candidate Ethical Principles Collective Utilitarian Principle Take the action that achieves the greater value for all of society This rule assumes you can prioritize values in a rank order and understand the consequences of various courses of action Copyright © 2002 Pearson Education, Inc.

Candidate Ethical Principles Risk Aversion Take the action that produces the least harm, or the least potential cost. Some actions have extremely high failure costs of a very low probability or extremely high failure costs of moderate probability Avoid high-failure cost actions and choose actions whose consequences would not be catastrophic, even if there were a failure Copyright © 2002 Pearson Education, Inc.

Candidate Ethical Principles No Free Lunch Assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise If something someone else has created is useful to you, it has value and you should assume the creator wants compensation for this work Copyright © 2002 Pearson Education, Inc.

Candidate Ethical Principles The New York Times Test (Perfect Information Rule) Assume that the results of you decision on a matter will be the subject of a lead article in the New York Times the next day Will the reaction of readers be positive or negative? Would you parents, friends, and children be proud of your decisions Copyright © 2002 Pearson Education, Inc.

Candidate Ethical Principles The Social Contract Rule Would you like to live in a society where the principle you are supporting would become an organizing principle of the entire society? You might think it is wonderful to download illegal copies of music tracks, but you might not want live in a society that did not respect property rights, such as your property rights to the car in your driveway, or your rights to a term paper or original art Copyright © 2002 Pearson Education, Inc.

Information Collected at E-commerce Sites Personally identifiable Information (PII) is any data that can be used to identify, locate, or contact an individual Anonymous information is demographic and behavioral information that does not include any personal identifiers Copyright © 2002 Pearson Education, Inc.

Profiling: Privacy and Advertising Networks Profiling is the creation of digital images that characterize online individual and group behavior Anonymous profiles identify people as belonging to highly specific and targeted groups Personal profiles add a personal e-mail address, postal address, and/or phone number to behavioral data Copyright © 2002 Pearson Education, Inc.

Personal Information Collected by E-commerce Sites Page 463, Table 9.2 Copyright © 2002 Pearson Education, Inc.

The Internet’s Major Personally Identifiable Information Gathering Tools Page 464, Table 9.3 Copyright © 2002 Pearson Education, Inc.

The Concept of Privacy Privacy is the moral right of individuals to be left alone, free from surveillance or interference from other individuals or organizations, including the state Information privacy includes both the claim that certain information should not be collected at all by governments or business firms, and the claim of individuals to control the use of whatever information that is collected about them Copyright © 2002 Pearson Education, Inc.

The Concept of Privacy Informed consent is consent given with knowledge of all material facts needed to make a rational decision Opt-in requires and affirmative action by the consumer to allow collection and use of consumer information Opt-out -- the default is to collect information unless the consumer takes and affirmative action to prevent the collection of data Copyright © 2002 Pearson Education, Inc.

Excerpts from KMart’s BlueLight.com Privacy Policy Page 469, Table 9.4 Copyright © 2002 Pearson Education, Inc.

Federal Privacy Laws Page 471, Table 9.5 Copyright © 2002 Pearson Education, Inc.

Federal Trade Commission Fair Information Practice Principles Page 472, Table 9.6 Copyright © 2002 Pearson Education, Inc.

FTC Recommendations Regarding Online Profiling Page 473, Table 9.7 Copyright © 2002 Pearson Education, Inc.

Summary of Proposed e-commerce Privacy Legislation in 2001 Page 474, Table 9.8 Copyright © 2002 Pearson Education, Inc.

Private Industry Self-Regulation Safe harbor is a private self-regulating policy and enforcement mechanism that meets the objectives of government regulators and legislation but does not involve government regulations or enforcement Copyright © 2002 Pearson Education, Inc.

Percentage of Web Sites with Privacy Seals Page 475, Figure 9.2 Copyright © 2002 Pearson Education, Inc.

A Summary of DoubleClick’s Privacy Policy Page 477, Table 9.9 Copyright © 2002 Pearson Education, Inc.

Privacy Advocacy Groups Page 479, Table 9.10 Copyright © 2002 Pearson Education, Inc.

Technological Solutions to Privacy Invasion on the Web P3P (Platform for Privacy Preferences) is a standard designed to communicate to Internet users a Web site’s privacy policy, and to compare that policy to the user’s own preferences, or to other standards such as the FTC’s FIP guidelines or the EU Data Protection Directive Copyright © 2002 Pearson Education, Inc.

Technological Protections for Online Privacy Page 480, Table 9.11 Copyright © 2002 Pearson Education, Inc.

How P3P Works Page 481, Figure 9.3 Copyright © 2002 Pearson Education, Inc.

Intellectual Property Rights Congress shall have the power to “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writing and discoveries.” Copyright © 2002 Pearson Education, Inc.

Copyright: The Problem of Perfect Copies and Encryption Copyright law protects original forms of expression such as writings, art, drawings, photographs, music, motion pictures, performances, and computer programs from being copied by others for a minimum of 50 years “Look and feel” copyright infringement lawsuits are precisely about the distinction between and idea and its expression Copyright © 2002 Pearson Education, Inc.

Copyright: The Problem of Perfect Copies and Encryption Doctrine of fair use permits teachers and writers to use copyrighted materials with permission under certain circumstances Digital Millennium Copyright Act (DMCA) of 1998 is the first major effort to adjust the copyright laws to the Internet age Copyright © 2002 Pearson Education, Inc.

Fair Use Considerations to Copyright Protection Page 486, Table 9.12 Copyright © 2002 Pearson Education, Inc.

The Digital Millennium Copyright Act Page 487, Table 9.13 Copyright © 2002 Pearson Education, Inc.

Patents: Business Methods and Processes “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.” Patent grants the owner an exclusive monopoly to the ideas behind an invention for 20 years Copyright © 2002 Pearson Education, Inc.

Explosion of Internet and E-commerce Patents Page 490, Figure 9.4 Copyright © 2002 Pearson Education, Inc.

Selected E-commerce Business Methods Patents Page 492,Table 9.14 Copyright © 2002 Pearson Education, Inc.

Trademarks: Online Infringement and Dilution Trademark is “any work, name, symbol, or device, or any combination there of … used in commerce … to identify and distinguish … goods … from those manufactured or sold by others and to indicate the source of the goods.” Copyright © 2002 Pearson Education, Inc.

Trademarks: Online Infringement and Dilution Trademark -- a mark used to identify and distinguish goods and indicate their source Dilution is any behavior that would weaken the connection between the trademark and the product Copyright © 2002 Pearson Education, Inc.

Trademarks and the Internet Anticybersquatting Consumer Protection Act (ACPA) creates civil liabilities for anyone who attempts in bad faith to profit from an existing famous or distinctive trademark by registering an Internet domain name that is identical, or confusingly similar, or “dilutive” of that trademark Copyright © 2002 Pearson Education, Inc.

Trademarks and the Internet Cybersquatting involves the registration of an infringing domain name, or other Internet use of an existing trademark, for the purpose of extorting payments from the legitimate owners Cyberpiracy involves the same behaviour as cybersquatting, but with the intent of diverting traffic from the legitimate site to an infringing site Copyright © 2002 Pearson Education, Inc.

Internet and Trademark Law Page 495, Table 9.15 Copyright © 2002 Pearson Education, Inc.

Trademarks and the Internet The use of trademarks in metatags is permitted if the use does not mislead or confuse consumers The permissibility of using trademarks as keywords on search engines is also subtle and depends both on the extent to which such use causes “initial customer confusion” and the content of the search results Copyright © 2002 Pearson Education, Inc.

Trademarks and the Internet Linking refers to building hypertext links from one site to another site Deep linking involves bypassing the target site’s home page, and going directly to a content page Framing involves displaying the content of another Web site inside your own Web site within a frame or window Copyright © 2002 Pearson Education, Inc.

Governance Governance has to do with social control: Who will control e-commerce, what elements will be controlled, and how will the controls be implemented? Copyright © 2002 Pearson Education, Inc.

The Evolution of Governance of E-commerce Page 500, Table 9.16 Copyright © 2002 Pearson Education, Inc.

Public Government and Law Taxation illustrates the complexity of governance and jurisdiction of e-commerce In both Europe and the United States, governments rely on sales taxes based on the type and value of goods sold There is no integrated rational approach to taxation of domestic or international e-commerce Copyright © 2002 Pearson Education, Inc.

Public Safety and Welfare Electronic media of all kinds have historically been regulated by governments Critical issues in e-commerce center around the protection of children, strong sentiments against pornography in public media, efforts to control gambling, and the protection of public health through restricting sales of drugs and cigarettes Copyright © 2002 Pearson Education, Inc.

Protecting Children Communications Decency Act (1996) makes it a felony criminal offence to use any telecommunications device to transmit “any comment, request, suggestion, proposal, image or other communications which is obscene, lewd, lascivious, filthy, or indecent” to anyone, and in particular, to persons under the age of 18 years of age Copyright © 2002 Pearson Education, Inc.

Protecting Children Children’s Online Protection Act (1998) made it a felony criminal offense to communicate for “commercial purposes” “any material harmful to minors” Private pressure from organized groups has also been successful in forcing some Web sites to eliminate the display of pornographic materials Copyright © 2002 Pearson Education, Inc.

Gambling, Cigarettes, and Drugs It is unclear if online gambling is illegal under U.S. federal law Most online gambling sites are located offshore in Costa Rica or Antigua Geolocation software attempts to identify the geographical location of Web users Copyright © 2002 Pearson Education, Inc.

Equity and the Digital Divide The Digital Divide refers to the large differences in Internet access and e-commerce access among income, ethnic, and age groups. Lack of such access affects the ability of children to improve their learning with educational software, of adults to acquire valuable technology skills, and of families to benefit from online connections to important health and civic information Copyright © 2002 Pearson Education, Inc.