Regulatory, Ethical, and Compliance Issues in EC

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1.Understand the foundations for legal and ethical issues in EC. 2.Describe civil, intellectual property, and common law. 3.Understand legal and ethical challenges and how to contain them. 4.Explain privacy, free speech, and defamation and their challenges. 16-1

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 5.Describe types of fraud on the Internet and how to protect against them. 6.Describe the needs and methods to protect sellers. 7.Describe EC-related societal issues. 8.Describe Green EC and IT. 16-2

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall intellectual property Creations of the mind, such as inventions, literary and artistic works, and symbols, names, images, and designs, used in commerce LAWS ARE SUBJECT TO INTERPRETATION 16-3

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall THE LAW: A SYSTEM FOR SOCIAL CONTROL AND PROTECTION – due process A guarantee of basic fairness and fair procedures in legal action – right Legal claim that others not interfere with an individual’s or organization’s protected interest 16-4

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall THE LAW: A SYSTEM FOR SOCIAL CONTROL AND PROTECTION – protected interests Interests, such as life, liberty, and property, which a national constitution protects. – duty Legal obligation imposed on individuals and organizations that prevents them from interfering with another’s protected interest or right 16-5

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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall PERSONAL AND PROPERTY RIGHTS – Rights are divided into two categories: personal rights and property rights Generally, the interests of life and liberty fall into the personal rights category The major property rights relevant to EC and Web sites are: 1.Control of the use of the property 2.The right to any benefit from the property 3.The right to transfer or sell the property 4.The right to exclude others from the property 16-7

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – civil litigation An adversarial proceeding in which a party (the plaintiff) sues another party (the defendant) to get compensation for a wrong committed by the defendant 16-8

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall REGULATORY COMPLIANCE IN EC – regulatory compliance Systems or departments in an organization whose job is to ensure that personnel are aware of and take steps to comply with relevant laws, standards, policies, and regulations – compliance data Pertaining to enterprise included in the law that can be used for the purpose of implementing or validating compliance 16-9

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall CRIMINAL LAW AND CIVIL LAW – Characteristics of Criminal and Civil Laws crime Offensive act against society that violates a law and is punishable by the government criminal laws Laws to protect the public, human life, or private property statutes Rules that define criminal laws 16-10

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – civil laws Laws that enable a party (individual or organization) that has suffered harm or a loss to bring a lawsuit against who is responsible for the harm or loss 16-11

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall intellectual property law Area of the law that includes patent law, copyright law, trademark law, trade secret law, and other branches of the law such as licensing and unfair competition 16-12

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – copyright An exclusive right of the author or creator of a book, movie, musical composition, or other artistic property to print, copy, sell, license, distribute, transform to another medium, translate, record, perform, or otherwise use – infringement Use of the work without permission or contracting for payment of a royalty 16-13

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – digital rights management (DRM) An umbrella term for any of several arrangements that allow a vendor of content in electronic form to control the material and restrict its usage fair use The legal use of copyrighted material for noncommercial purposes without paying royalties or getting permission 16-14

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – patent A document that grants the holder exclusive rights to an invention for a fixed number of years – trademark A symbol used by businesses to identify their goods and services; government registration of the trademark confers exclusive legal right to its use 16-15

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall COMMON LAW IN E-COMMERCE – common law (case law) Law created by judges in court decisions – tort Civil wrong that can be grounds for a lawsuit FAN AND HATE SITES – cyberbashing Domain name that criticizes an organization or person OTHER E-COMMERCE LEGAL ISSUES 16-16

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall ethics The branch of philosophy that deals with what is considered to be right and wrong privacy The right to be left alone and free of unreasonable personal intrusions 16-17

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall business ethics A form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment EC ETHICAL ISSUES – Non–Work-Related Use of the Internet – Codes of Ethics 16-18

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall PRIVACY RIGHTS AND PROTECTION – opt-out Business practice that gives consumers the opportunity to refuse sharing information about themselves – opt-in Agreement that requires computer users to take specific steps to allow the collection of personal information 16-19

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall FREE SPEECH ONLINE VERSUS PRIVACY PROTECTION – Children’s Internet Protection Act (CIPA) Law that mandates the use of filtering technologies in schools and libraries that received certain types of U.S. federal funding – legal precedent A judicial decision that may be used as a standard in subsequent similar cases 16-20

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall THE PRICE OF PROTECTING AN INDIVIDUALS’ PRIVACY HOW INFORMATION ABOUT INDIVIDUALS IS COLLECTED – Web Site Registration – Cookies – spyware All unwanted software programs designed to steal proprietary information, or that target data stores containing confidential information 16-21

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – RFID’s Threat to Privacy – Other Methods Site transaction logs EC ordering systems and shopping carts Search engines Behavioral targeting Polling and surveys Payment information and e-wallets – Privacy of Employees 16-22

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall PRIVACY PROTECTION BY INFORMATION TECHNOLOGIES PRIVACY ISSUES IN WEB 2.0 TOOLS AND SOCIAL NETWORKS – Presence, Location, and Privacy – Free Speech via Wikis and Social Networks 16-23

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall PRIVACY PROTECTION BY ETHICAL PRINCIPLES – Notice or awareness – Choice or consent – Access or participation – Integrity or security – Enforcement or redress Online Privacy Clarification 16-24

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall THE USA PATRIOT ACT – Platform for Privacy Preferences Project (P3P) A protocol allowing Web sites to declare their intended use of information they collect about browsing users PRIVACY PROTECTION IN COUNTRIES OTHER THAN THE UNITED STATES 16-25

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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall CONSUMER (BUYER) PROTECTION – Representative Tips and Sources for Your Protection – Third-Party Assurance Services – Computer Fraud and Abuse Act (CFAA) Major computer crime law to protect government computers and other Internet-connected computers 16-27

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall SELLER PROTECTION – What Can Sellers Do? PROTECTING BUYERS AND SELLERS: ELECTRONIC AND DIGITAL SIGNATURES – electronic signature A generic, technology-neutral term that refers to the various methods by which one can “sign” an electronic record – Authentication and Biometric Controls 16-28

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall digital divide The gap that has emerged between those who have and those who do not have the ability to use the technology electronic discovery (e-discovery) Discovery in civil litigation that deals with information in electronic format; also referred to as electronically stored information (ESI) 16-29

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Green computing The study and practice of eco-friendly computing resources; is now a key concern of businesses in all industries—not just environmental organizations Green IT Green IT begins with manufacturers producing environmentally friendly products and encouraging IT departments to consider more friendly options like virtualization, power management, and proper recycling habits 16-30

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall HOW TO OPERATE GREENER BUSINESSES, DATA CENTERS, AND SUPPLY CHAINS GLOBAL GREEN REGULATIONS – Electronic Product Environmental Assessment Tool (EPEAT) A searchable database of computer hardware that meets a strict set of environmental criteria – The Field of Green Technology and Telecommuting 16-31

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall OTHER SOCIETAL ISSUES – Education – Public Safety, Criminal Justice, and Homeland Security – Health Aspects 16-32

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1.What legal and ethical issues should be of major concern to an EC enterprise? 2.What are the most critical ethical issues? 3.How can intellectual property rights be protected when it comes to digital content 4.How can patent cost be monitored effectively? 5.What is the ethical principle of protecting the privacy of customers? 6.How can a company create opportunities in the global trend toward Green EC? 16-33