Legal and Ethical Issues in ECommerce Major Legal

Legal and Ethical Issues in E-Commerce

Major Legal and Ethical Issues in Electronic Commerce • • Privacy Intellectual Property Free Speech Taxation Computer Crimes Consumer Protection Miscellaneous

Legality vs. Ethics • Illegal acts break the law while unethical acts may not be illegal • Ethics – Branch of philosophy that deals with what is considered right or wrong – Right and wrong not always clear – Consider • Company sells profiles of customers with information collected through cookies • Company allows personal use of Web but secretly monitors activity • Company knowingly sells tax software with bugs

Privacy Issues • Information privacy: claim of individuals, groups, or organizations to determine when and to what extent information about them is disseminated. • Right to privacy is not absolute • Public’s right to know superceded individuals right to privacy

How is private information collected? • Reading your newsgroup postings • Finding you in an Internet Directory/Database • Making your browser collect information about you • Recording what your browser says about you • Reading your email • Most common methods are cookies and site registration

Web Site Registration • Must fill in registration to get to site • Sometimes sold to third parties Cookies • Help maintain user status • A temporary passport • Used for – Customizing sites (Yahoo) – Improve online services (Amazon) – Collect demographics and usage statistics (Doubleclick) • Protection – Delete cookies – Anti-cookie software

Five Principles of Privacy Protection • Notice/Awareness – Notice of collection practices prior to collecting information • Choice/consent – Consumers to be made aware of options and give consent • Access/participation – Must be able to access and challenge information • Integrity/Security – Must be assured data is secure • Enforcement/Redress – Government legislation or legal remedies

Principles of Safe Harbor • Companies must tell consumers how and why personal data is collected and who it's shared with • Consumers must be able to request their data not be shared • Companies must provide notice and choice before data is given to third parties • Consumers must have access to data about them and have the ability to correct mistakes • Companies must take reasonable measures to protect data • Personal data must be relevant to its intended purpose • Procedures must be in place to settle complaints and resolve disputes

Intellectual Property • Intangible property rights • In E-Commerce – Copyrights – Patents – Trademarks • IP Rights are not absolute – Perishable – Legal exceptions to allow public use at a specific rate

Copyrighting • Protects expression of idea – not the idea itself • Expires after certain number of years after death of copyright holder • Generally, contents of websites are copyrighted Copyrights Protection • Digital Watermarks – Embedded invisible bits in the digital content – Cannot prevent copying but helps identify who is doing it • Validation codes • Activation or deactivation of software

Patents • Grants holder exclusive rights on inventions for fixed time Trademarks • Graphical sign used by business to identify their goods and services – Type of IP – Must meet criteria of distinctive, original, and not deceptive – Domain names can be trademarked if they meet above criteria

Spamming • Indiscriminate distribution of messages without permission of receiver Other Issues • Consider on your own – Electronic contracts – Online Gambling – Validity of electronic documents – Time and date on documents across borders – Which country has jurisdiction over E-Commerce transaction – Can web site link to another without permission

What is M-Commerce? • Also known as pervasive computing – E-commerce done in a wireless environment – Any transaction with a monetary value that is conducted via a mobile telecommunications network.

Other Drivers of E-Commerce • • Widespread availability of devices No need for PC Cell phone culture Vendors push Declining prices Improvement in bandwidth E-commerce growth in general Digital divide (more cell phones in developing countries)

Obstacles to M-Commerce • Usability issues – Effectiveness, efficiency, satisfaction • Lack of standardized security protocol • Insufficient bandwidth • Transmission limitations – GPS does not work in cities with skyscrapers • Power consumption • Wireless and Health hazards