©2006 Prentice Hall ELC 310 Day 5

©2006 Prentice Hall Agenda Questions? Assignment 1 Corrected 5 A’s, 1 B, 2 C’s, 2 D’s and 1 non-submit Assignment 2 is Posted in WebCT Due Sept 30 Exam 1 on Sept 30 Chaps 1-5 of Strauss Text 10 Short Essays (2 per chapter) You will have 70 minutes to complete exam Open book, open notes Extra credit (up to 10 Points) Which company has put its entire media advertising budget into Super Bowl Ads? How many years in a row have they done this? You should be working on your eMarketing Plans Due Nov 4, Presentations on Nov. 1 & 4 Discussion on Ethical and Legal Issues of eMarketing

©2006 Prentice Hall Assignment 1 recap Results generally good I was looking for 4 things A clearly articulated goal or objective A properly prepared SWOT analysis Strengths and weaknesses were internal Opportunity and threats were external A plan that that took in consideration the results of the SWOT analysis and met the goal and objective stated in part 1 Performance Metrics that allowed the student or an external entity to gauge the progress of the student as they implemented their plan to achieve their goal or objective. Some general problems Excessive wordiness—saying the same thing twice or many times Less is more Poorly organized (did not follow format) Goal->SA(SWOT)->Strategy->Metrics Lack of effort

©2006 Prentice Hall5-1 E-Marketing 4/E Judy Strauss, Adel I. El-Ansary, and Raymond Frost Chapter 5: Ethical and Legal Issues

©2006 Prentice Hall5-2 Chapter 5 Objectives After reading Chapter 5 you will be able to: Compare and contrast ethics and law. Discuss the implications of ethical codes and self- regulation. Identify some of the main privacy concerns within traditional and digital contexts. Explain some of the important copyright, patent, trademark, and data ownership issues related to the Internet. Highlight key ethical and legal concerns related to online expression.

©2006 Prentice Hall5-3 Software Piracy 40% of all software worldwide was pirated in Piracy resulted in a US$10.7 billion loss for firms. 840,000 Internet sites sold counterfeited software. Vietnam, China, Indonesia, Ukraine, and Russia have highest piracy rates. (~90%) Microsoft believes that education is the best weapon against piracy. Do you agree?

©2006 Prentice Hall5-4 Ethics and law are closely related. Ethics concerns the analysis of what is right and wrong and how we judge the differences. Ethics is a collective consensus about right and wrong Modern technology presents a challenge to marketing ethics. Critical issues include: Ownership of intellectual property Freedom of expression Use of data and its collection Status of children (<18) and digital networks Ethics and Legal Issues

©2006 Prentice Hall Overview of Ethics and Legal Issues Ethics: The values and practices of professionals, The concerns and values of society as a whole, Directed toward individual or group endeavors, Important contributions to legal developments = The experiences and practices of those who work in the field are helpful to those who are charged with regulation and legal decision-making.

©2006 Prentice Hall Overview of Ethics and Legal Issues Law: Also an expression of values, Created for broader purposes = national or sometimes international populations, It is a public endeavor = made by legislatures such as Congress or Parliament, enforced by executives or agencies, and interpreted by the courts, Progress in the law can be slow, and particularly within the new context of digital communication.

©2006 Prentice Hall Ethics & Ethical Codes The study of ethics: Central focus = analysis and description of basic concepts as what is right and wrong, The examination of responsibilities, rights, and obligations, Not limited to purely theoretical boundaries but study all levels of human interaction, Important aspect: the study of professional activities, Groups of individuals possessing special skills or knowledge have established codes and systems of fair practice, E.g. The American Marketing Association’s (AMA) Code of Ethics = Professional codes provide members with guidelines which are specific to their pursuits.

©2006 Prentice Hall5-5 What are the roles of formal laws vs. free operation of the market? Supporters of self-regulation stress the private sector’s ability to identify and resolve problems. Critics argue that incentives for self-regulation are insufficiently compelling and true deterrence will not be achieved. The commercial internet evolved during the Clinton Administration which believed in self- regulation –This has not continued under the Bush Administration The Problem of Self-Regulation

©2006 Prentice Hall5-6 The concept of privacy has both ethical and legal aspects. There is legal confusion regarding privacy. No specific privacy provision within the U.S. Constitution. Privacy has been addressed in the common law of the courts. (lawsuits-not arrests) Within society, privacy interests compete with concerns for safety, economics, and need for association with others. Privacy

©2006 Prentice Hall 4 defined invasion of privacy violations 1.Unreasonable intrusion into seclusion of another 2.Unreasonable publicity of another's private life 3.The appropriation of another’s name or likeness 4.The publication of another’s personal information in a false light.

©2006 Prentice Hall Privacy Disagreement remains: The seclusion theory = the ability to remain isolated from society.  This model encourages laws and ethical standards which are oriented toward maintaining personal distance and punishing those who cross the limits set by individuals. The access-control:  Places its emphasis upon laws and standards which enable persons to reasonably regulate the information which they are giving up. The autonomy model:  Define what constitutes private data = those which are necessary for a person to make life decisions.

©2006 Prentice Hall5-7 Privacy Within Digital Contexts AMA Code of Ethics for Marketing on the Internet: “information collected from customers should be confidential and used only for expressed purposes.” Online advertising firms such as DoubleClick, have traditionally recorded users’ clickstreams to form user profiles for marketing purposes. Controversy arose in 2000 when DoubleClick acquired consumer names, addresses and buying histories and planned to combine the offline data with clickstream data.

©2006 Prentice Hall5-8 Privacy Within Digital Contexts, cont. Data can be obtained through cookies. Cookies are packets of data that are created and stored on the user’s hard drive in response to instructions received from a Web page. Cookies allow marketers to pinpoint an individual’s online behavior.

©2006 Prentice Hall5-9 The Privacy Debate Supporters of systems such as DoubleClick’s argue that users wish to receive the benefits of targeted advertisers. Critics point out that most users do not understand how computers process data. Preliminary terms of the FTC agreement include: Obligation to provide notice of data collection. Ban on combining existing data with personal information unless opt-in permission is obtained.

©2006 Prentice Hall5-10 The FTC has identified the following norms for the ethical use of consumer information: Notice Consent Access Security Enforcement The FTC and Privacy Norms

©2006 Prentice Hall5-11 The law protects intangible or intellectual property through 3 basic mechanisms. Copyright Patent law Trademark Protection of Digital Property

©2006 Prentice Hall5-12 Copyright is the primary means of protecting most expression on the Internet. Doctrine of Fair Use Ability to copy protected material for education and news reporting. Doctrine of First Sale Limit the ability of copyright holder to obtain profit after the initial time at which the material is sold. Other copyright protection under No Electronic Theft Act (NET) and Digital Millennium Copyright Act (DMCA). Copyright

©2006 Prentice Hall5-13 Trademark law concerns the ownership of intellectual property that identifies goods or services. Trademark law as been applied to the Internet naming system of domain names. Similarities in names may result in trademark infringement claims. Cybersquatting involves the registration of domains that resemble or duplicate existing ones. Trademarks

©2006 Prentice Hall5-14 Applying patent law to computing is an uncertain but developing field. Creators of software are attempting to make use of patent law protection. Advocates argue that granting of patents for software will encourage innovation. Critics argue that patents will have stifling and monopolistic effects. Patents

©2006 Prentice Hall5-15 Licenses are increasingly popular method of intellectual property protection. Allow the buyer to use the product but restrict duplication or distribution. Licenses may be two basic types Shrinkwrap or break-the-seal licenses Clickwrap licenses where the user is required to click a button to accept the terms Legal trend favors enforcement of software licenses. Licenses

©2006 Prentice Hall5-16 Online Expression Freedom of expression is protected by the First Amendment. Internet technology has resulted in what many consider inappropriate or untargeted types of consumer contact. Spam is the mass distribution of unsolicited electronic mail. CAN-SPAM Act creates a framework for marketing. Expression directed to children remains a highly visible issue within online law and ethics.

©2006 Prentice Hall Maine Spam law The Maine legislature enacted a new “spam” law, 10 MRSA §1497 (the “Act”), which became effective on September 13, 2003 Requires Spam to adhere to certain restrictions Must be labeled Must have valid return address Must have opt-out method Question; Does the SPAM you received conform? Source:

©2006 Prentice Hall5-17 Emerging Issues Online governance The Internet Corporation for Assigned Names and Numbers (ICANN) was formed in Jurisdiction The ability of a court or other authority to gain control over a party. Traditionally based on physical presence. Treaties may provide for international resolution and enforcement.

©2006 Prentice Hall5-18 Fraud The use of deception and false claims to obtain profit. The Internet provides opportunities for novel deceptions. Spoofing is the use of or Web sites to impersonate individuals or corporations. The FTC, FBI, and state agencies have increased their efforts to track and prosecute fraudulent conduct. Emerging Issues, cont.

©2006 Prentice Hall5-19 FBI Investigates Online Fraud

©2006 Prentice Hall Conclusion Changes within the ethical and legal framework of networked communication are occurring at a fast pace. Marketing professionals are: Required to remain well-informed of regulations and accepted practices, Called upon to contribute to the global dialogue about electronic spaces.

©2006 Prentice Hall Assignment 2 Prepare a two to three page paper (not less than 500 and not more than 1000 words) that answers the following questions. What does digital privacy mean to you? (25%) Does your notion of digital privacy change when (40%) a) you are at work? b) you are at school? c) you are at home? d) you are using a publicly accessible computer such as one at a library? Is your notion of digital privacy supported by Law? If so, which ones? (25%) What actions do you take to protect your digital privacy? (10%)