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2. Chapter 8 Ethical, Social, and Political Issues in E-commerce
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3. The Right to Be Forgotten: Europe Leads on Web Privacy
Is Google responsible for the accuracy of links to other information? Why or why not?
Why do European and American views on privacy protection differ so dramatically?
How can the different perspectives on privacy be managed in a global environment like the Internet?
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4. Understanding Ethical, Social, and Political Issues in E-commerce
Internet, like other technologies, can:
Enable new crimes
Affect environment
Threaten social values
Costs and benefits must be carefully considered, especially when there are no clear-cut legal or cultural guidelines
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5. A Model for Organizing the Issues
Issues raised by Internet and e-commerce can be viewed at individual, social, and political levels
Four major categories of issues:
Information rights
Property rights
Governance
Public safety and welfare
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6. The Moral Dimensions of an Internet Society
Figure 8.1, Page 490
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7. Basic Ethical Concepts
Ethics
Study of principles used to determine right and wrong courses of action
Responsibility: is a key element of ethical action ; means that you accept the potential costs, duties, and obligations for the decisions you make
Accountability: is a feature of systems and social institutions; mechanisms are in place to determine who took responsible action, and who is responsible
Liability
Laws permitting individuals to recover damages done to them by other actors, systems, or organizations
Due process
Laws are known, understood
Ability to appeal to higher authorities to ensure laws applied correctly
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8. Analyzing Ethical Dilemmas
A dilemma
a situation in which there are at least two diametrically opposed actions, each of which supports a desirable outcome.
Process for analyzing ethical dilemmas:
Identify and clearly describe the facts
Define the conflict or dilemma and identify the higher-order values involved. ethical, social, and political issues always reference higher values (freedom, privacy, etc.)
Identify the stakeholders. every ethical, social, and political issue has stakeholders - find out identity of these people and what they want will help in designing a solution
Identify the options that you can reasonably take. sometimes none of the options satisfy everyone
Identify the potential consequences of your options: some options may be ethically correct but disastrous from other points of view; some may work in one instance but not in others
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9. Candidate Ethical Principles What ethical principles or rules should you use to make a decision?
Golden Rule: do unto others as you would have them do unto you
Universalism: If an action is not right for all situations, then it is not right for any specific situation.
Slippery Slope: If an action cannot be taken repeatedly, then it is not right to take at all.
Collective Utilitarian Principle: Take the action that achieves the greater value for all of society
Risk Aversion: Take the action that produces the least harm, or the least potential cost.
No Free Lunch: Assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise.
The New York Times Test: Assume that the results of your decision on a matter will be the subject of the lead article in the New York Times the next day. Getting judged by society.
The Social Contract Rule: Would you like to live in a society where the principle you are supporting would become an organizing principle of the entire society.
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10. Privacy and Information Rights
Moral right of individuals to be left alone, free from surveillance, or interference from other individuals or organizations
Information privacy
The “right to be forgotten”: the claim of individuals to be able to edit and delete personal information online
Claims:
Certain information should not be collected at all
Individuals should control the use of whatever information is collected about them
Behavioral tracking on the Internet, social sites, and mobile devices
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11. Privacy and Information Rights (cont.)
Threats to privacy
Personal information collected by commercial Web sites
Personal information collected by government authorities
Impact of mobile devices
Tracking people's locations and movements
Tracking personal behavior
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12. Information Collected at E-commerce Sites
Data collected includes
Personally identifiable information (PII):any data that can be used to identify, locate, or contact an individual
Anonymous information: demographic and behavioral information that does not include any personal identifiers
Types of data collected
Name, address, phone, , social security
Bank and credit accounts, gender, age, occupation, education
Preference data, transaction data, clickstream data, browser type
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15. Social Networks and Privacy
Encourage sharing personal details
Pose unique challenge to maintaining privacy
Facebook's facial recognition technology and tagging
Personal control over personal information vs. organization's desire to monetize social network
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16. Mobile and Location-Based Privacy Issues
Smartphone apps
Funnel personal information to mobile advertisers for targeting ads
Track and store user locations
Track users’ use of other apps
U.S. Supreme Court rules that police need warrant prior to searching a cell phone for information
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17. Profiling and Behavioral Targeting
Creation of digital images that characterize online individual and group behavior
Anonymous profiles
Personal profiles
Advertising networks
Track consumer and browsing behavior on Web
Dynamically adjust what user sees on screen
Build and refresh profiles of consumers
Google's AdWords program: : program to target ads to users based on their prior search histories and profiles
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18. Profiling and Behavioral Targeting (cont.)
Deep packet inspection: a technology for recording every key stroke at the ISP level
Business perspective:
Increases effectiveness of advertising, subsidizing free content
Enables sensing of demand for new products and services
Critics' perspective:
Undermines expectation of anonymity and privacy
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19. The Internet and Government Invasions of Privacy
NSA documents released by Snowden
Government agencies are largest users of private sector commercial data brokers
Various laws strengthen ability of law enforcement agencies to monitor Internet users without knowledge, sometimes without judicial oversight
CALEA, USA PATRIOT Act, Cyber Security Enhancement Act, Homeland Security Act
Encryption features implemented by Apple, Google for mobile phones
National security agency
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20. Legal Protections
In United States, privacy rights explicitly granted or derived from:
Constitution
First Amendment—freedom of speech and association
Fourth Amendment—unreasonable search and seizure
Fourteenth Amendment—due process
Specific statutes and regulations (federal and state)
Common law
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21. Informed Consent and Notice
U.S. firms can gather and redistribute transaction information without individual's informed consent
Illegal in Europe
Informed consent:
Opt-in: requires a potential customer to self-select the services they wish to subscribe to. requires an affirmative action by the consumer to allow collection and use of consumer information
Opt-out: is where an existing customer receives electronic communication, generally without providing express permission. the default is to collect information unless the consumer takes an affirmative action to prevent the collection of data
Many U.S. e-commerce firms merely publish information practices as part of privacy policy or use opt-in as default
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22. The FTC's Fair Information Practices
Guidelines (not laws)
Used to base assessments and make recommendations
Sometimes used as basis for law (Children’s Online Privacy Protection Act -COPPA)
Fair Information Practice principles
Notice: Provide a privacy statement – who collects & receives what data how, and for what purpose
Choice: Obtain consent for secondary use, opt-in or opt-out, depending on requirements.
Access: Permit individuals to view data from and about them; to contest the accuracy and possibly the completeness of that data.
Security: Ensure data quality – accuracy, and possibly completeness. Ensure data security – no data loss or unauthorized destruction, modification, disclosure, use.
Enforcement
Restricted collection
Enforcement: The Federal Trade Commission  identified three types of enforcement measures: self-regulation , private remedies, government enforcement.
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23. The FTC's Fair Information Practices (Cont.)
New privacy framework (2010)
Scope
Privacy by design
Simplified choice
Greater transparency
2012 Report: Industry best practices
Do not track
Mobile privacy
Data brokers
Large platform providers
Development of self-regulatory codes
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24. The European Data Protection Directive
European approach:
Privacy protection much stronger than in United States
Comprehensive and regulatory in nature
European Commission's Directive on Data Protection (1998):
Standardizes and broadens privacy protection in European Union countries
Department of Commerce safe harbor program:
For U.S. firms that wish to comply with directive
2014 E.U. package of reforms
Right to be forgotten
Easier access to data
Default opt-out provisions, clear opt-in statements
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25. Private Industry Self-Regulation
Safe harbor programs:
Private policy mechanism to meet objectives of government regulations without government involvement
Privacy seal programs (TRUSTe)
Industry associations include:
Online Privacy Alliance (OPA)
Network Advertising Initiative (NAI)
Ad Choices Program
Privacy advocacy groups
Emerging privacy protection business
Reputation.com, Avira Social Network Protection, and so on
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26. Technological Solutions
Spyware blockers
Pop-up blockers
Secure
Anonymous r ers
Anonymous surfing
Cookie managers
Disk/file erasing programs
Policy generators
Public key encryption
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27. Intellectual Property Rights
All tangible and intangible products of human mind
Major ethical issue:
How should we treat property that belongs to others?
Major social issue:
Is there continued value in protecting intellectual property in the Internet age?
Major political issue:
How can Internet and e-commerce be regulated or governed to protect intellectual property?
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28. Intellectual Property Protection
Three main types of protection:
Copyright
Patent
Trademark law
Goal of intellectual property law:
Balance two competing interests—public and private
Maintaining this balance of interests is always challenged by the invention of new technologies
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29. Copyright
Protects original forms of expression (but not ideas) from being copied by others for a period of time
“Look and feel” copyright infringement lawsuits
Fair use doctrine
Digital Millennium Copyright Act, 1998
First major effort to adjust copyright laws to Internet age
Implements WIPO treaty that makes it illegal to make, distribute, or use devices that circumvent technology-based protections of copyrighted materials
Safe-harbor provisions
WIPO: World Intellectual Property Organization 
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30. Patents Grant owner 20-year monopoly on ideas behind an invention
Machines
Man-made products
Compositions of matter
Processing methods
Invention must be new, non-obvious, novel
Encourages inventors
Promotes dissemination of new techniques through licensing
Stifles competition by raising barriers to entry
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31. E-commerce Patents
1998 State Street Bank & Trust vs. Signature Financial Group
Business method patents
2014 Alice Corporation:
Supreme Court rules that software does not make a basic business method or abstract idea patentable
E-commerce patents
Amazon: One-click purchasing
Akamai: Internet content delivery global hosting system
Google: Search technology, location technology
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32. Theft and Innovation: The Patent Trial of the Century
Do you agree with the jury finding that Samsung violated Apple's patents in the Samsung Galaxy design?
Should “trade dress” patents cover basic shape elements, such as round-cornered squares used for icons?
The Apple “look and feel” has inspired the “look and feel” of many other Web sites and devices. How is this different from the Samsung case?
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33. Trademarks Identify, distinguish goods, and indicate their source
Purpose
Ensure consumer gets what is paid for/expected to receive
Protect owner against piracy and misappropriation
Infringement
Market confusion
Bad faith
Dilution
Behavior that weakens connection between trademark and product
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34. Trademarks and the Internet
Cybersquatting and brand-jacking
Anticybersquatting Consumer Protection Act (ACPA)
Cyberpiracy
Typosquatting
Metatagging
Keywording
Linking and deep linking
Framing
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35. Who Governs the Internet and E-commerce?
Mixed mode environment
Self-regulation, through variety of Internet policy and technical bodies, co-exists with limited government regulation
ICANN : Domain Name System
Internet can be easily controlled, monitored, and regulated from a central location
 Internet Corporation for Assigned Names and Numbers
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36. Taxation
Non-local nature of Internet commerce complicates governance and jurisdiction issues
Sales taxes
Governments in Europe and U.S. rely on sales taxes
MOTO retailing tax subsidies
E-commerce tax subsidy
Internet Tax Freedom Act
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37. Internet Sales Tax Battle
Given the nature of the Internet, should sales tax be based on the location of the consumer rather than the seller?
Why is there a struggle to define the nature of “small business”? How big is a “small business”?
Are bricks-and-clicks retailers disadvantaged by local sales tax laws?
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38. Net Neutrality Net neutrality (Open Internet)
All Internet activities charged the same rate, regardless of bandwidth used
Differentiated pricing strategies
Cap pricing (tiered plans)
Speed tiers
Usage metering
Congestion pricing
Highway (“toll”) pricing
Comcast slows users for certain traffic
FCC's Open Internet Order
Netflix-Comcast agreement
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39. Public Safety and Welfare
Protection of children and strong sentiments against pornography
Passing legislation that will survive court challenges has proved difficult
Efforts to control gambling and restrict sales of drugs and cigarettes
Currently, mostly regulated by state law
Unlawful Internet Gambling Enforcement Act
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40. The Internet Drug Bazaar
What's wrong with buying prescription drugs online, especially if the prices are lower?
What are the risks and benefits of online pharmacies?
Should online pharmacies require a physician's prescription?
How do online pharmacies challenge the traditional business model of pharmacies and drug firms?
What are the challenges in regulating online pharmacies?
Who benefits and who loses from online pharmacies?
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