Legal issues vs. Ethical issues

•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.