1. COPYRIGHT © 2011 South-Western/Cengage Learning. 1 Click your mouse anywhere on the screen to advance the text in each slide. After the starburst appears, click a blue triangle to move to the next slide or previous slide.

2. COPYRIGHT © 2011 South-Western/Cengage Learning. 2 Quote of the Day “The moving finger writes; and, having writ Moves on: nor all thy piety nor wit Shall lure it back to cancel half a line. Nor all thy tears wash out a word of it.” Omar Khayyam (1050?-1123?), Persian poet, astronomer and mathematician

3. COPYRIGHT © 2011 South-Western/Cengage Learning. 3 Cyberlaw Issues  Contract law has to deal with the validity of electronic signatures.  Securities law has to determine proper methods of online transactions.  Intellectual property law has been challenged by the ease of downloading copyrighted material and the potential for abuse.  The new area of cyberlaw itself is dealing with issues such as online privacy, hacking and spam.

4. COPYRIGHT © 2011 South-Western/Cengage Learning. 4 Privacy  Personal communications and private information such as financial data may be exposed when transmitted via the Internet from three main sources: Internet tracking Computer hard drive E-mail

5. COPYRIGHT © 2011 South-Western/Cengage Learning. 5 Government Regulation of Online Privacy  There is very little government regulation of Internet consumer privacy.  The First Amendment protects free speech, and that includes messages posted online.  The Fourth Amendment prohibits unreasonable searches and seizures by the government. This applies to computers and computer-based information.

6. COPYRIGHT © 2011 South-Western/Cengage Learning. 6 Government Regulation of Online Privacy  Federal regulations The FTC prohibits unfair and deceptive acts or practices. This applies to online privacy. The FTC does not require web based companies to have privacy policies, but if they do have one, they must follow it.  Electronic Communications Privacy Act of 1986 This federal statute prohibits unauthorized interception or disclosure of wire and electronic communications or unauthorized access to stored communication. The USA Patriot Act has broadened the government’s right to monitor electronic communication.

7. COPYRIGHT © 2011 South-Western/Cengage Learning. 7 Government Regulation of Online Privacy  Children’s Online Privacy Protection Act of 1998 This statute prohibits internet operators from collecting information from children under age 13 without parental permission. It also requires sites to disclose how they will use any information they acquire  Gramm-Leach-Bliley Privacy Act of 1999 Requires banks and other financial institutions to disclose to consumers any non-public information they wish to reveal to third parties Also prohibits pretexting, a process by which information brokers use deception to find out private financial information.

8. COPYRIGHT © 2011 South-Western/Cengage Learning. 8 Government Regulation of Online Privacy  State Regulations A few states have enacted online privacy statutes.  European Directive Prohibits transfer of personal data to any countries that do not provide adequate privacy protection. The US has not passed legislation to comply with this standard, but has established “safe harbor principles.” Any company that complies with safe harbor rules will be permitted to receive data from European companies.  Spyware Spyware is a computer program that slips onto your computer without your permission – through e-mails, downloads or software installation – and monitors your activities, usually for some illegal purpose.

9. COPYRIGHT © 2011 South-Western/Cengage Learning. 9 Spam  Unsolicited Commercial (or Bulk) e-mail Creates additional cost to internet users, as the ISP’s bear the costs for processing excessive e-mails.  Fraudulent Spam Up to 30% of all e-mail is spam; roughly half of all spam is fraudulent. FTC has attacked fraudulent spam, but enforcement is difficult.  Non-Fraudulent Spam Harder to fight, but some ISP’s block all messages from other ISP’s known to promote spam.

10. COPYRIGHT © 2011 South-Western/Cengage Learning. 10 Communications Decency Act of 1996  An ISP is not liable for information that is provided by someone else, even if it is transmitted through its service.

11. COPYRIGHT © 2011 South-Western/Cengage Learning. 11 Crime on the Internet  Hacking: gaining unauthorized access to a computer; illegal under the federal Computer Fraud and Abuse Act of 1986.  Fraud: deception of a person for the purpose of gaining money or property. Internet auctions are a venue for fraud –Shilling: bidding on your own items for sale or agreeing to cross-bid with a group of sellers –Selling defective or non-existent items  Identity Theft: not a new crime, but made easier with the Internet.  Phishing: sending of a fraudulent e-mail posing as a legitimate company, asking for personal information (such as account numbers or passwords)

12. COPYRIGHT © 2011 South-Western/Cengage Learning. 12 “The Internet has changed our lives in ways that were inconceivable a generation ago. The law in this area is so young and unformed that oftentimes we must ask not only, ‘What is the law?’ but also, ‘What should the law be?’” “The Internet has changed our lives in ways that were inconceivable a generation ago. The law in this area is so young and unformed that oftentimes we must ask not only, ‘What is the law?’ but also, ‘What should the law be?’”