Chapter 15 Legal & Ethical Issues

OBJECTIVES Ethical Issues Legal Issues What is Ethics? Major Threats Legal & Ethical Issues: Objectives OBJECTIVES Ethical Issues What is Ethics? Major Threats Improving the Climate Code of Ethics Self-Assessment Privacy Factor Legal Issues Liability Question Basis of Liability Copyrights & Trademarks Website – Product / Service? Warranties Strict Liability Taxation Issues

Legal & Ethical Issues: Ethical Issues WHAT IS ETHICS? Fairness, justice, equity, honesty, trustworthiness & equality Subjective Legal B C Immoral Moral A D Illegal

MAJOR THREATS Faster computers & networks Legal & Ethical Issues: Ethical Issues MAJOR THREATS Faster computers & networks Sophisticated telecommunications & routers Massive distributed databases Ease of access to information & knowledge base Transparency of software

IMPROVING THE CLIMATE Top management support Code of ethics Legal & Ethical Issues: Ethical Issues IMPROVING THE CLIMATE Top management support Code of ethics Ethics training program Motivation to focus on honesty & integrity

WHERE TO START Bottom-up Top-down Legal & Ethical Issues: Ethical Issues WHERE TO START Bottom-up Inculcates ethics behavior at the employee level with full support of top management Top-down The actions of the company start with the CEO Extend to a variety of stakeholders

Legal & Ethical Issues: Ethical Issues CODE OF ETHICS A declaration of principles and beliefs that govern how employees of a corporation are to behave Inspirational & disciplinary All-compassing & stable over time

SELF-ASSESSMENT A question-and-answer procedure Legal & Ethical Issues: Ethical Issues SELF-ASSESSMENT A question-and-answer procedure Allows individuals to appraise & understand their personal knowledge about a particular topic An educational experience

PRIVACY FACTOR Notice Choice Access Security/integrity Enforcement Legal & Ethical Issues: Ethical Issues PRIVACY FACTOR Notice Right to be told in advance Choice Final say regarding the use of personal info Access Access & correct any personal info Security/integrity Enforcement Backed by the courts if any principles are violated

THE LIABILITY QUESTION Legal & Ethical Issues: Legal Issues THE LIABILITY QUESTION Liability of Designer Nontrivial errors Out-of-bound errors Liability of User Passive negligence Basis of Liability Tort law Product liability

Legal & Ethical Issues: Legal Issues TORT LAWS ON INTERNET Settling contract problems between e-merchants & ISP Fraud – intent to deceive Negligence – failing to make certain action causing injury / material losses False advertising Misrepresentation – claiming a product will perform certain functions when it could not Trademark violations – under intellectual property law

Legal & Ethical Issues: Legal Issues COPYRIGHT Copyrights Ownership of an original work created by an author A form of intellectual property protection covers the ‘look & feel’ and content of printed media Gives author the right to exclude others from using the finished work Good for life of its author + 70 years

Legal & Ethical Issues: Legal Issues TRADEMARK / TRADE NAME A word / symbol distinguishing one good from other goods in the market A maze of federal & state laws Web designer – ‘work made for hire’

WEBSITE – PRODUCT/SERVICE? Legal & Ethical Issues: Legal Issues WEBSITE – PRODUCT/SERVICE? Product Software sold off the shelf Uniform Commercial Code (UCC) allows developer to limit liability for defective websites though a disclaimer of warranties Service Custom-designed software Negligence principles should be used

WARRANTIES Assurance made by seller about the goods sold Legal & Ethical Issues: Legal Issues WARRANTIES Assurance made by seller about the goods sold Express warranty Offered orally or in writing by maker of products Implied warranty Arises automatically when a sale is made Merchantability Disclaimer Seller’s intention to protect the business from unwanted liability

Legal & Ethical Issues: Legal Issues STRICT LIABILITY Joint & several liability for developers, manufacturers & distributors if tort theory applies Protects web visitor regardless of whether anyone is at fault

TAXATION ISSUES Controversial Different jurisdiction Legal & Ethical Issues: Legal Issues TAXATION ISSUES Controversial Different jurisdiction Consumers’ reaction

Chapter 15 Legal & Ethical Issues