1. Legal and Ethical Issues in E-Commerce

2. Major Legal and Ethical Issues in Electronic Commerce
Privacy
Intellectual Property
Free Speech
Taxation
Computer Crimes
Consumer Protection
Miscellaneous

3. Legality vs. Ethics
Illegal acts break the law while unethical acts may not be illegal
Ethics
Branch of philosophy that deals with what is considered right or wrong
Right and wrong not always clear
Consider
Company sells profiles of customers with information collected through cookies
Company allows personal use of Web but secretly monitors activity
Company knowingly sells tax software with bugs

4. Privacy Issues
Information privacy: claim of individuals, groups, or organizations to determine when and to what extent information about them is disseminated.
Right to privacy is not absolute
Public’s right to know superceded individuals right to privacy

5. How is private information collected?
Reading your newsgroup postings
Finding you in an Internet Directory/Database
Making your browser collect information about you
Recording what your browser says about you
Reading your
Most common methods are cookies and site registration

6. Web Site Registration Cookies Must fill in registration to get to site
Sometimes sold to third parties
Cookies
Help maintain user status
A temporary passport
Used for
Customizing sites (Yahoo)
Improve online services (Amazon)
Collect demographics and usage statistics (Doubleclick)
Protection
Delete cookies
Anti-cookie software

7. Five Principles of Privacy Protection
Notice/Awareness
Notice of collection practices prior to collecting information
Choice/consent
Consumers to be made aware of options and give consent
Access/participation
Must be able to access and challenge information
Integrity/Security
Must be assured data is secure
Enforcement/Redress
Government legislation or legal remedies

8. Principles of Safe Harbor
Companies must tell consumers how and why personal data is collected and who it's shared with
Consumers must be able to request their data not be shared
Companies must provide notice and choice before data is given to third parties
Consumers must have access to data about them and have the ability to correct mistakes
Companies must take reasonable measures to protect data
Personal data must be relevant to its intended purpose
Procedures must be in place to settle complaints and resolve disputes

9. Intellectual Property
Intangible property rights
In E-Commerce
Copyrights
Patents
Trademarks
IP Rights are not absolute
Perishable
Legal exceptions to allow public use at a specific rate

10. Copyrights Protection
Copyrighting
Protects expression of idea – not the idea itself
Expires after certain number of years after death of copyright holder
Generally, contents of websites are copyrighted
Copyrights Protection
Digital Watermarks
Embedded invisible bits in the digital content
Cannot prevent copying but helps identify who is doing it
Validation codes
Activation or deactivation of software

11. Patents
Grants holder exclusive rights on inventions for fixed time
Trademarks
Graphical sign used by business to identify their goods and services
Type of IP
Must meet criteria of distinctive, original, and not deceptive
Domain names can be trademarked if they meet above criteria

12. Spamming
Indiscriminate distribution of messages without permission of receiver
Other Issues
Consider on your own
Electronic contracts
Online Gambling
Validity of electronic documents
Time and date on documents across borders
Which country has jurisdiction over E-Commerce transaction
Can web site link to another without permission
Example Ticketmaster vs. Microsoft

13. What is M-Commerce? Also known as pervasive computing
E-commerce done in a wireless environment
Any transaction with a monetary value that is conducted via a mobile telecommunications network.

14. Other Drivers of E-Commerce
Widespread availability of devices
No need for PC
Cell phone culture
Vendors push
Declining prices
Improvement in bandwidth
E-commerce growth in general
Digital divide (more cell phones in developing countries)

15. Obstacles to M-Commerce
Usability issues
Effectiveness, efficiency, satisfaction
Lack of standardized security protocol
Insufficient bandwidth
Transmission limitations
GPS does not work in cities with skyscrapers
Power consumption
Wireless and Health hazards