1. 1 C23 - April 28 2008 Business 54 - Introduction to eCommerce Spring 2008

2. 2 C23 - April 28 2008 Class Game Plan  Law, Ethics and the Internet.  Question and Answer.  Lab Time.

3. 3 C23 - April 28 2008  Privacy has been an issue from the start on the Internet  Internet was designed-built to be a secure network!  But it’s always been the Wild, Wild West!  Adult Porn.  Use of ‘Cookies’.  Web Bugs.  Selling Customer Identify & Behavior Information.  Credit Card Fraud.  Today, the primary Internet Privacy-Security concerns are:  Hacking.  Identity Theft.  Spamming.  Copywriting / Legal Use of Content.  Shifting public attitudes have prompted governmental action. Introduction to Privacy

4. 4 C23 - April 28 2008 Identity Theft  Original problem was plain old credit card theft.  Today credit card misuse is less than 1% of all eCommerce transactions:  VeriSign.  Pay Pal.  eWallet.  MSN.Passport.  Basic solutions for individual consumers:  Avoid bogus-scam sites.  Use only one credit card for online purchases.  Read privacy and billing disclosures!  There is still theft out here, but is now the province of organized crime:  Ransom.  Creation of false identifies.  Your site needs to be protected:  Avoid liability by not storing credit card information directly.  Invest in hacker security software.  Invest in policies and procedures.

5. 5 C23 - April 28 2008  Spamming is the sending of unwanted & unsolicited email.  Affects both individuals and web sites.  Growing problem BECAUSE IT WORKS!  Why is it a problem for your web site?  Performance Impacts.  Time Waste.  $$$ cost to stop/block.  Some ways to block Spam:  Simple (Addressor) Blocking.  Algorithm-based Blocking.  Market-based.  Challenge-Response.  Image-based Login’s. Targeted, Direct Online Marketing, aka Spam I e G G 7 F H

6. 6 C23 - April 28 2008 Spamming  Has become an annoyance second only to telemarketing calls during mealtime.  Has become a political issue.  But may not be easy to legislate it out of existence: Many sites are overseas or anonymous. Who is the true owner /operator? May not be subject to US laws and regulations.  Technology solutions are not providing a good answer either.  Some action will be taken unless the Market / Web finds a way to police itself.

7. 7 C23 - April 28 2008 Copyrights / Misuse of Content  Success of your eCommerce business can be dependant upon the uniqueness of your idea and the Look & Feel-Operation of your site.  Need to protect your Intellectual Property (IP):  Copyrighting.  Trade Secrets.  Trademarks / Service Marks.  Napster lessons.  Court Case Precedents.  But you can use Free Content to improve your site:  Rule Of 80% / 8 Bars.  Public Domain Content.  Non-copyrighted / Unmarked Content.  Special Suppliers.

8. 8 C23 - April 28 2008 New Govt Regulations & Activities  States and Federal government have moved to both improve AND control the Internet.  Areas of focus include:  Privacy Rules & Disclosures.  Digital Images.  Libel-Slander.

9. 9 C23 - April 28 2008 Privacy & Disclosures  Abuses in the use and selling of online customer data has prompted Federal action.  Legislation now limits what can be done with customer data:  Can only be used / shared in the aggregate with other companies.  Detailed information and web history CAN be shared with affiliated organizations, regardless if they are online or offline.  Other provisions include:  Must move towards an Opt-in / Double Opt-in option.  Must have a Privacy Policy.  Must disclose uses / sources of data.  Non-Deniability.  Applies also to Credit Card, Financial Institutions and Telephone companies.

10. 10 C23 - April 28 2008 Digital Images  Use of digital likeness for commercial purposes:  John Wayne & Coors beer ads.  Trends towards totally digital movies: Finding Nemo. Final Fantasy. Convergence of video games and Movies (e.g., Mortal Kombat; Laura Croft).  Some entertainers although dead are still earning money:  The estates of James Dean and Marilyn Monroe still earn over $100K a year in royalties!  Tremendous cost and other incentives for studios to migrate towards ‘digital actors’.  The Sonny Bono Law:  Extends copyrights of images effectively forever.  Designed to protect actors and entertainers from studios-producers until long after they are dead.  Has yet to be tested in court. It can be argued that it creates an unreasonable time period of protection.

11. 11 C23 - April 28 2008 Free Speech on the Internet  Can you be held liable for slander or libel on the Internet?  You have limited recourse, either as an individual or an eCommerce company.  Recent court decisions say NO. Free Speech trumps other rights:  Sullivan vs. NY Times precedent holds also on the Internet.  Commercial speech (e.g., defaming competitors) yet to be fully tested.  Lastly, many sites are overseas or anonymous:  Who is the owner /operator?  May not be subject to US laws and regulations.  Best option is to monitor and counter, not sue.  Just another cost of doing business on the Web.

12. 12 C23 - April 28 2008  Net Neutrality.  Protecting kids.  Cyber-Kiddie Porn. Other Privacy / Ethical Concerns

13. 13 C23 - April 28 2008 C17 - April 7, 2008 Questions…… (and maybe some) Answers

14. 14 C23 - April 28 2008 C17 - April 7, 2008 Lab Time  Visit http://www.ftc.gov/bcp/menus/consumer/tech/privacy.shtm. http://www.ftc.gov/bcp/menus/consumer/tech/privacy.shtm  Check out a some ‘typical’ Internet frauds and scams.  Think about: Why do so many people fall for internet scams?