•Laws
are made by govt. and developed by case precedents. Laws are strict legal rules
governing the acts of all citizens.
•Violation
leads to the punishment by legal system.
•Ethics:-
branch of philosophy that deals with what is considered to be right and wrong.
Ethics are supported by common agreements in a society as to what
is right and what is wrong.
What is unethical is not necessarily illegal.
•Web site collection of information from potential customers and
sells it to advertiser.
•Spying on employees’ web browsing.
•Company knowingly sells tax software with bugs.
•Major legal and ethical
issues in electronic commerce
Privacy
•The right to be left alone and the right to be free of
unreasonable personal intrusions.
•The right of privacy is not absolute but must be balanced
against the needs of society.
•The public’s right to know is superior to the individual’s
right of privacy.
•Collecting information about
Individuals
•Collection of user’s data can be use for the good of society
like: reduce fraud, crime, tax evasion, welfare fraud, employment of illegal
aliens etc.
Methods of collecting information:
»Complete a registration form on a Web site (B2C websites
normally collect the information, customer provide voluntarily to win a
lottery)
»Recording an individual’s actions as they navigate the web with
a browser using cookies.
»Usage of spywares (spybots or tracking softwares)
•Spyware
secretly collects info and relays it to the advertiser.
•It
normally comes up while downloading and start to track the user downloading
habits.
•It
slows down computer and can scan user’s hard drive and get the private
information like social security number, bank account, passwords etc.
Protection of Privacy:
–Principles include to info
collection in ecommerce:
•Notice/Awareness:- consumers must be given notice
about the usage of personal information prior to collection.
•Choice/consent:- make consumer aware of their
options how their personal info may be used. Consent may be granted through
Access/participation:
Consumer must be able to access their personal information and
challenge the validity of the data.
Integrity/security:
– assured consumer about
the security of data from fraudulent
activities
– Necessary to take
whatever precautions are required to
ensure that data are protected from loss, unauthorized
access, and fraudulent use.
•How is private information collected?
•Reading
your newsgroup postings
•Finding
you in an Internet Directory
•Making
your browser collect information about you
•Reading
your email
»From Rainone, et al, 1998)
•Most
common methods are cookies and site registration
•Web Site Registration
•Must
fill in registration to get to site
•Sometimes
sold to third parties
•User
survey found (Eighth User Survey, 1998)
–40% users falsify information
–Nearly 67% (US and Europe) don’t register because of privacy
concerns
–Nearly 57% say they don’t trust sites collecting information
–Only 6% will always register when asked
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
•PGP’s Cookie Cutter
•Luckman’s Anonymous Cookie
•CookieCrusher
•Cookie Monster
–
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
Opt-out
Clause:
Agreement
that requires computer users to take specific steps to prevent the collection
of personal info.
–Opt-in clause:
Agreement that requires computer users to take
specific steps to allow the collection of personal info.
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
•EU’s Data Privacy Directive
•Stronger
protection of personal data such as race, politics, finances, religion, health
and union membership
•Other
countries following suit
–Argentina, Australia, Canada,
Switzerland and New Zealand
•Bush
rejects EU laws as being unduly burdensome
•Safe
Harbor Agreement is a bridge between the US and European positions
–
•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 Rights
Intellectual property refers to “creation of
the mind: inventions, literary and artistic works, symbols, names, images, and
designs used in commerce.”
•Types
of intellectual property in E-Commerce:
•Copyrights
•Trademarks
•Domain names
•Patents
•Exclusive
grant from the govt. That confers on its owner an essentially exclusive right
to:
»Reproduce a work
»Distribute, perform, or display to public in any form including
internet
»Owner can export the work to another country
Examples:
Literary work, Musical work, dramatic work, artistic work etc.
Copyrights
•Protects
expression of idea – not the idea itself
–Example , pull-down menus cannot
be copyrighted
•Owner
exclusive right to
–Copy the work
–Distribute to the public
•Expires
after certain number of years after death of copyright holder
–28 years in the US
–50 years in UK
•Generally,
contents of websites are copyrighted
•Copyrights Protection Approaches
It is possible to use software to produce
digital content that cannot be copied.
•The use of cryptography to prevent copyright violation.
•The tracking of copyright violations.
•Digital Watermarks
•Embedded invisible bits in the digital content
•Cannot prevent copying but helps identify who is doing it
(Digimarc’s MarSpider, a search program)
•Validation codes
•Activation or deactivation of software
Trademarks
•Graphical
sign (words, letters, designs, numbers, shapes, combination of colors etc.)
used by business to identify their goods and services.
–Must meet criteria of distinctive, original, and not deceptive
–Domain names can be trademarked if they meet above criteria
•WWF
won first ever ruling against man who filed for worldwrestlingfederation.com
The federal dilution act 1995, infringement carries criminal
liabilities
Cybersquatting
The practice of registering domain names in order to sell them
later at a hgh price.
Consumer protection act of 1999 is aimed at cyber squatters who
register domain names of famous companies or people to hold them hostage for
ransom payments.
e.g.
Christian dior, Nike, Deutsche Bank, Microsoft etc.
•Censorship, Internet Decency, Spamming, and
Pop-up Ads
•Censorship
– attempts to control material on the Web
•Communications
Decency Act (CDA) was passed by Congress but later ruled unconstitutional
•Protecting
Children
–Parental control
–Governmental control
–ISP accountability
•AOL does not allow hate sites
•Email Spamming
Unsolicited commercial e-mail is the use of e-mail to send unwanted
ads or correspondence.
•Indiscriminate
distribution of messages without permission of receiver
•Spam
comprised 30% of all AOL mail in 1998
–Now down to 10% with spam blockers
•Some
legislation out there
–Unsolicited Commercial Electronic Mail Act
•Requires all spam to start with word “advertisement”
•Includes name and address of sender
Solutions to spamming:
Junk mail filters
Automatic junk mail deleters
Antispam capabilities combined with firewall and antivirus protection.
Pop-up ads:
They are exploding, sometimes it is difficult to close these ads
when they appear on the screen.
They are unsolicited but sometimes may be part of consumer’s
permission marketing agreement
Several software packages offer pop-up stoppers:
Adsubtract Pro,
guidescope,
Norton internet security etc. block banners, flash ads and cookies. All major
ISP’s are providing pop-up protection.
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