Elias M. Awad Third Edition ELECTRONIC COMMERCE From Vision to Fulfillment 6-1© 2007 Prentice-Hall, Inc ELC 200 Day 17

6-2 © 2007 Prentice-Hall, Inc Agenda Assignment 6 Due Assignment 7 posted –Due Nov 11:05 PM –1 more assignments after this one Quiz 3 will Nov. 10 –Chaps 7-12 –M/C and Short Essays Finish discussion on eCore values We will covering Chapter 16 next, followed by chapters 13, 14, 15 –Chapter 16 provides the framework for the eCommerce Initiative paper that is due at the end of the semester.

Schedule for rest of semsterws Nov 6 –Chap 16 Nov 10 –Quiz 3 –Assignment 7 due Nov 13 –Chap 13 Nov 17 –Chap 13 Nov 20 –Chap 14 Nov 24 –Chap 14 Dec 1 –No class –Assignment 8 due Dec 4 –Chap 15 Dec 8 –Chap 15 Dec 11 –Quiz 4 –Assignment 9? Dec 10 AM –Presentation of eCommerce Initiative 6-3 © 2007 Prentice-Hall, Inc

12-4 © 2007 Prentice-Hall, Inc The Legal Question of Liability Product liability - tort that makes a manufacturer liable if its product has a defective condition that makes it unreasonably dangerous to the user or consumer Strict liability - a seller is liable for any defective or hazardous products that unduly threaten a user’s safety Companies may be liable if employees using mobile tools are involved in accidents The application of the negligence doctrine to today’s technological society

12-5 © 2007 Prentice-Hall, Inc Tort Law on the Internet Tort: a wrongful act subject to civil action Tort Law: a special area of law focused on remedying wrongs between parties Fraud: the intent to deceive Negligence: failing to take a certain action, which in turn causes injury or material loss to another False Advertising: advertising the availability of a product or a service when no such thing is available Misrepresentation: claiming a product will perform certain functions when in fact it cannot

12-6 © 2007 Prentice-Hall, Inc Warranties Uniform Commercial Code (UCC): a law drafted by the National Conference of Commissioners on Uniform State Laws, which governs commercial transactions Warranty: an assurance made by the seller about the goods sold Express Warranty: a warranty offered orally or in writing by the maker of the product

12-7 © 2007 Prentice-Hall, Inc Warranties (Cont’d) Implied Warranty: a warranty that arises automatically from the fact that a sale has been made and the assumption that the product will do what it is supposed to do –Maine is only 1 of 10 states that have an “implied warranty” law Office_Consumer_Law_Guide&v=article&id=27922http:// Office_Consumer_Law_Guide&v=article&id=27922 –Maine also has a lemon law for newer cars (under 3 years old) Office_Consumer_Law_Guide&v=article&id=27925http:// Office_Consumer_Law_Guide&v=article&id=27925 Disclaimer: evidence of the seller’s intention to protect the business from unwanted liability

12-8 © 2007 Prentice-Hall, Inc Liability Designer’s Liability –Out-of-bounds error : an error that occurs because either the software did not have the expertise to address the particular problem or the designer improperly condensed the technology –Nontrivial error : an error that triggers other areas in the software to malfunction and is difficult to correct –Doctrine of respondent superior User’s Liability –Passive negligence : negligent by omission –Affirmative duty: must use or provide product (service) as intended

12-9 © 2007 Prentice-Hall, Inc Copyrights, Trademarks, and Trade Names Intellectual property : includes software, books, music, videos, trademarks, copyrights, and Web pages Copyright : ownership of an original work created by an author –Copyright law is a law that gives the author or creator of a tangible product the right to exclude others from using the finished work –Protected works include: Graphic works Web sites –Good for the life of its author plus an additional 70 years after the author’s death The Digital Millennium Copyright Act (DMCA)Digital Millennium Copyright Act Trademark : registration of a company’s trade name so that others cannot use it; a word or a symbol that distinguishes a good from other goods in the market (registered with Patent Office)

12-10 © 2007 Prentice-Hall, Inc Taxation Issues Sales tax is a very controversial issue On the Internet, tax collection is not easy The rules for taxation differ by country All indicators suggest that sales-tax revenue loss is projected to increase exponentially unless something is done to collect the tax Internet Tax Freedom Act

12-11 © 2007 Prentice-Hall, Inc Taxation Issues (Cont’d) Internet Tax Freedom Act –A three-year moratorium on special, multiple, or discriminatory taxes on the Internet that would be imposed by any state or local governments –An advisory committee to explore different issues relating to Internet taxes, government Internet policy, and its effects on e-commerce –The federal government is barred from taxing the Internet or any transaction that takes place through it

12-12 © 2007 Prentice-Hall, Inc Internet Taxation Today US –ITFA extended on October 30, 2007 for 7 more years –Sales Tax Fairness and Simplification Act (H.R. 3396) in hearingsSales Tax Fairness and Simplification Act(H.R. 3396) EU VAT still in place – 26E449F D04BD766AEC3432https://secure.hmce.gov.uk/ecom/voes/welcome.do;jsessionid= 26E449F D04BD766AEC3432 WTO – no internet taxes More Info – More information on Internet taxation –Internet_taxation.pptInternet_taxation.ppt

12-13 © 2007 Prentice-Hall, Inc Jurisdiction The legitimate scope of government power Whose laws apply? State and federal laws limit a court’s jurisdiction over a defendant from another state International jurisdiction is especially complex and controversial –In an international dispute over e-commerce, whose laws apply? –Violations of Intellectual Property

12-14 © 2007 Prentice-Hall, Inc Guidelines Regarding Domain Names and Trademarks Find out whether the proposed domain name infringes on any trademarks Secure federal trademark registration of the proposed name – Register the proposed domain name with InterNIC, In the event of a poached domain name, bring a lawsuit to force InterNIC to reassign the name to the original owner Get permission before linking to other Web sites

12-15 © 2007 Prentice-Hall, Inc International Issues What right does any one country have to determine the materials that should be available on the Internet? Can a country regulate an entity in cyberspace, but not on the soil of that country? World Intellectual Property Organization (WIPO) succeeded in two treaties to adapt copyright rules for e-commerce EU’s Electronic Commerce Directive gave online business firms assurance, in 2000, that the firms would have to comply with laws only where the firms are based, not in any other country in the union

12-16 © 2007 Prentice-Hall, Inc International Issues (Cont’d) Digital Millennium Copyright Act of 1998 EU’s Rome II Directive hopes to allow consumers to sue e-businesses in their home country Hague Convention drafted a treaty in 1992 designed to set global standards for defamation, copyright, and libel on the Internet

12-17 © 2007 Prentice-Hall, Inc Intellectual Property Intellectual property describes the ideas, inventions, technologies, music, and literature that are intangible when created and are converted into tangible products for market consumption IP laws and cultural norms vary from country to country

12-18 © 2007 Prentice-Hall, Inc Management Implications Legal rules that define the Internet are yet to be clarified Long-range effect of Internet patents, especially those held by e-companies like Amazon.com that cover fundamental online business practices Ultimate goal in doing business on the Internet is to promote standards that everyone can accept or adopt Management must focus on legal and consumer protection issues surrounding B2C e-commerce

12-19 © 2007 Prentice-Hall, Inc Chapter Summary Legal and ethical implications of the Internet are attracting attention in industries and governments around the world Question of ethics in e-commerce is the current challenge confronting U.S. organizations Several threats to ethics Privacy is a basic American value Many of the legal questions that arise in e- commerce are not settled due to lack of specific laws or legal guidelines

12-20 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) Internet copyright and trademark violations fall under intellectual property laws The question of whether a Web site is a product or a service elicits varied opinions On the Internet, tax collection is not easy The ultimate goal of doing business on the Internet is to promote ethics through standards that everyone can accept or adopt