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ETHICAL, SOCIAL, AND

POLITICAL ISSUES INE-COMMERCE

Chapter 8

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Learning Objectives

Recognize the main ethical, social, andpolitical issues raised by e-commerce

Understand how individual privacy is impacted

by e-commerce

Understand the various forms of intellectualproperty and the challenges involved in

protecting it Understand how governance of the Internet

has changed over time

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Why does e-commerce raise

ethical, social, and political issues?

Part of the answer lies in the underlyingfeatures of the Internet technology itself, andthe ways in which it is exploited by

organizations and other individuals Internet technology and its use in e-commerce

disrupt existing social and organizational

relationships and understanding

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Unique Features of E-Commerce Technology and theirPotential Ethical, Social, and Political Implications (Table8.1)

E-Commerce

Technology

DimensionPotential Ethical, Social, and Political Significance

Ubiquity Work and shopping can invade family life

Shopping can distract workers at work lowering productivity

Use of mobile devices can lead to automobile or industrial accidents

Global reach Reduces cultural diversity in products

Weakens local small firms while strengthening large global firms

Easier to move manufacturing to low-wage areas of the worldWeakens nations abilities to control information

Universalstandards

Increases vulnerability to viruses and hacking

Increases the likelihood of information crime

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Unique Features of E-Commerce Technology and theirPotential Ethical, Social, and Political Implications (cont.)

E-Commerce

Technology

DimensionPotential Ethical, Social, and Political Significance

Richness Reduces use of text and potentially the ability to readEnables development of persuasive messages that may reducereliance on multiple independent sources of information

Interactivity Interaction with commercial sites may be shallow and meaningless

Customers do not really co-produce the product

Amount of customization is minimal

Increases virtual interaction which may reduce face-to-face interaction

Informationdensity

Total amount of information increases, but so does the possibility offalse or misleading information, unwanted information, and invasion ofsolitude

Overall information quality may decline

Individual information overload

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Unique Features of E-Commerce Technology and theirPotential Ethical, Social, and Political Implications (cont.)

E-Commerce

Technology

DimensionPotential Ethical, Social, and Political Significance

Personalization/customization Opens up the possibility of intensive invasion of privacy forcommercial and governmental purposes that is unprecedented

Socialtechnology

Creates opportunities for cyberbullying, abusive language, andpredation

Creates new challenges to privacy

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A Model for Organizing theIssues

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Privacy and Information Rights

Privacy is the moral right of individuals to beleft alone, free from surveillance orinterference from other individuals or

organizations, including the state Information privacy is a subset of privacy

Important issues:

What information is collected? Is the information personally identifiable?

How is the information collected?

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The Internets Major Information

Gathering Tools (Table 8.3)

Advertisingnetworks

Social networks

Cookies Spyware

Search enginebehavioral targeting

Shopping carts

Forms

Site transaction logs

Search engines

Digital wallets(single sign-on

services) Digital rights

management (DRM)

Trusted computingenvironments

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Legal Protections

In the US, Canada, and Germany, rights toprivacy are explicitly granted in, or can bederived from, founding documents such as

constitutions In England and the US, there is also protection

of privacy in the common law (a body of courtdecisions)

Federal and state privacy laws aresummarized in Table 8.4

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Privacy Protection Concepts

Informed consent

Opt-in vs. opt-out

FTCs fair information practice principles:

Notice/awareness Choice/consent

Access/participation consumers should be able toreview and contest accuracy and completeness ofdata about them

Security must take reasonable steps to ensureaccuracy and security of data

Enforcement must be a mechanism in place toenforce FIP

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FTC Recommendations Regarding

Online Profiling (Table 8.6)

Notice Complete transparency to user by providing disclosure and

choice options

Choice

Opt-in for PII, opt-out for non-PII Access

Security

Enforcement Done by third parties

Restricted collected No collection of information about sensitive financial or

medical topics, sexual behavior or sexual orientation, oruse of SSNs

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Intellectual Property Rights

Once intellectual works become digital, itbecomes difficult to control access, use,distribution, and copying

The major ethical issue related to e-commerce

and intellectual property concerns how we(individuals and organizations) should treatproperty that belongs to others

There are three main types of intellectualproperty protection:

Copyrights Patents Trademarks

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Copyrights

In the US, copyright law protects original forms of

expression such as writings (books, periodicals, lecturenotes), art, drawings, photographs, music, motion pictures,performances, and computer programs from being copied

by others for a period of time Copyright protection is for a period of 95 years for

corporate-owned works, and life plus 70 years for workscreated by individuals

Since the first federal Copyright Act of 1790, the intentbehind copyright laws has been to encourage creativityand authorship by ensuring that people receive financialand other benefits from their work

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Fair Use Doctrine

There are situations where strict copyright observancecould be harmful to society, potentially inhibiting otherrights such as right to freedom of expression orthought

The doctrine of fair use permits teachers and writersto use copyrighted materials without permission undercertain circumstances (fair use):

Character of use

Nature of the work Amount of work used

Market effect of use

Context of use

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The Digital Millennium Copyright

Act (DMCA) of 1998

The Digital Millennium Copyright Act (DMCA)of 1998 is the first major effort to adjust thecopyright laws to the Internet age

For example, the DMCA includes sections

that:Makes it illegal to circumvent technologicalmeasures to protect works

Requires ISPs to take down sites they host ifthey are infringing on copyrights

Permits users to make a copy of software formaintenance or repair of the computer Allows libraries to make digital copies of works for

internal use Extends musical copyrights to include

webcasting

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Patents

whoever invents or discovers any new and usefulprocess, machine, manufacture, or composition ofmatter, or any new and useful improvement thereof,may obtain a patent thereof, subject to the conditions

and requirements of this title. Section 101, U.S.Patent Act

A patent grants the owner a 20-year exclusivemonopoly on the ideas behind an invention

What are some examples of patentable e-commerceprocesses?

Why are e-commerce patents so controversial?

A list of selected e-commerce patents is in Table 8.11

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Trademarks

A trademark is any word, name, symbol, ordevice, or any combination thereof used incommerce to identify and distinguish goods from those manufactured or sold byothers and to indicate the source of thegoods. The Trademark Act, 1946

Trademarks and the Internet issues

CybersquattingCyberpiracy

Metatagging and keywording

Linking and framing

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Governance

Governance of both the Internet and e-commerce has gone through four stages:Government control period (1970-1994)

Privatization (1995-1998) Self-regulation (1995-present)

Governmental-regulation (1998-present)

What are the benefits of stronger Internet

regulation? What are the benefits of reduced regulation?

Other issues include taxation and Netneutrality