1. 第十七章 電子商務對於法律面、道德面 和社會面的衝擊 (Legal, Ethical, and Social Impacts of EC)

2. 淡江大學資管系所侯永昌 1 Learning Objectives §Describe the differences between legal and ethical issues in EC §Understand the difficulties of protecting privacy in EC §Discuss issues of intellectual property rights in EC §Understand the conflict between free speech and censorship on the Internet §Describe major legal issues in EC §Describe the types of fraud on the Internet and how to protect against them §Describe representative societal issues in EC §Describe the role and impact of virtual communities on EC §Describe the future of EC

3. 淡江大學資管系所侯永昌 2 MP3.com, Napster, and Intellectual Property Rights (1) §The Problem l Before the advent of the Web, people made audiotape copies of music and videos to give to friends and family or used them for their own personal enjoyment l Such activities were ignored by the producers, distributors, and artists who had the legal rights to the content l MP3.com enabled users to listen to music from any computer with an Internet connection without paying royalties l Using peer-to-peer (P2P) technology, Napster supported the distribution of music and other digitized content among millions of users

4. 淡江大學資管系所侯永昌 3 MP3.com, Napster, and Intellectual Property Rights (2) §The Problem (cont.) l MP3 and Napster claimed to be supporting what had been done for years and were not charging for their services l Popularity of MP3.com and P2P services was too great for the content creators and owners to ignore l To the creators and owners, the Web was becoming a vast copying machine l MP3.com’s and Napster’s services could result in the destruction of many thousands of jobs and millions of dollars in revenue

5. 淡江大學資管系所侯永昌 4 MP3.com, Napster, and Intellectual Property Rights (3) §The Solution l December 2000, EMusic (emusic.com) filed a copyright infringement lawsuit against MP3.com l In 2001, Napster faced similar legal claims, lost the legal battle, and was forced to pay royalties for each piece of music it supported—Napster collapsed—in October 2003 it reopened as “for fee only” l Existing copyright laws were written for physical, not digital, content l The Copyright Infringement Act states, “the defendant must have willfully infringed the copyright and gained financially” l The “no financial gain” loophole in the Act was later closed

6. 淡江大學資管系所侯永昌 5 MP3.com, Napster, and Intellectual Property Rights (4) §The Results l In 1997, the No Electronic Theft Act (NET) was passed, making it a crime for anyone to reproduce and distribute copyrighted works applied to reproduction or distribution accomplished by electronic means even if copyrighted products are distributed without charge, financial harm is experienced by the authors or creators of a copyrighted work

7. 淡江大學資管系所侯永昌 6 MP3.com, Napster, and Intellectual Property Rights (5) §The Results (cont.) l MP3.com suspended operations in April 2000 and settled the lawsuit l Napster suspended service and settled its lawsuits tried to resurrect itself as an online music subscription service with the backing of Bertelsmann AG filed for bankruptcy in June 2002 purchased by Roxio with plans to revive Napster into a royalty-paying framework

8. 淡江大學資管系所侯永昌 7 MP3.com, Napster, and Intellectual Property Rights (6) §What we can learn… l All commerce involves a number of legal, ethical, and regulatory issues l EC adds to the scope and scale of these issue l What constitutes illegal behavior versus unethical, intrusive, or undesirable behavior?

9. 淡江大學資管系所侯永昌 8 Legal Issues vs. Ethical Issues (1) §Ethics: The branch of philosophy that deals with what is considered to be right and wrong l What is unethical is not necessarily illegal l Ethics are supported by common agreement in a society as to what is right and wrong, but they are not subject to legal sanctions

10. 淡江大學資管系所侯永昌 9 Legal Issues vs. Ethical Issues (2) §EC ethical issues l Non-work-related use of the Internet Employees use e-mail and the Web for non-work-related purposes The time employees waste while surfing non-work-related Web sites during working hours is a concern

11. 淡江大學資管系所侯永昌 10 Legal Issues vs. Ethical Issues (3) §EC ethical issues l Corporate code of ethics Issue written policy guidelines about employee use of the Internet Copyrighted trademarked material cannot be used without permission Post disclaimers concerning content, such as sample code, that the company does not support Post disclaimers of responsibility concerning content of online forums and chat sessions Make sure that Web content and activity comply with the laws in other countries

12. 淡江大學資管系所侯永昌 11 Legal Issues vs. Ethical Issues (4) §EC ethical issues l Corporate code of ethics (cont.) Make sure that the company’s Web content policy is consistent with other company policies Appoint someone to monitor Internet legal and liability issues Have attorneys review Web content to make sure that there is nothing unethical, or illegal, on the company’s Web site

13. 淡江大學資管系所侯永昌 12 Legal Issues vs. Ethical Issues (5) §Major ethical/legal issues l Privacy l Intellectual property rights l Unsolicited electronic ads and spamming l Free speech versus censorship l Consumer and merchant protection against fraud

14. 淡江大學資管系所侯永昌 13 Privacy §The right to be left alone and the right to be free of unreasonable personal intrusions The right of privacy is not absolute. Privacy must be balanced against the needs of society The public’s right to know is superior to the individual’s right of privacy

15. 淡江大學資管系所侯永昌 14 Collecting Information about Individuals over the Internet §By reading an individual’s newsgroup postings §By looking up an individual’s name and identity in an Internet directory §By reading an individual’s e-mail §By conducting surveillance on employees §By wiretapping wireline and wireless communication lines and listening to employees §By asking an individual to complete a Web site registration §By recording an individual’s actions as they navigate the Web with a browser, usually using cookies

16. 淡江大學資管系所侯永昌 15 Web Site Registration §Most B2C and marketing Web sites ask visitors to fill out registration forms including: l names l addresses l phone numbers l e-mail addresses l hobbies, etc. §There are few restraints on the ways in which the site can use this information l Use it to improve customer service or its own business l Or sell the information to another company that could use it in an inappropriate or intrusive manner

17. 淡江大學資管系所侯永昌 16 Cookie §A small piece of data that is passed back and forth between a Web site and an end user’s browser as the user navigates the site; enables sites to keep track of users’ activities without asking for identification §Users can protect themselves against cookies: l delete them from their computers l use anticookie software §Microsoft Passport lets consumers permanently enter a profile of information along with a password and use this information and password repeatedly to access services at multiple sites—affords opportunities to invade privacy

18. 淡江大學資管系所侯永昌 17 Privacy of Employees §Why monitoring employees’ e-mail and Web activities? l wasting time online l may disclose trade secrets and possibly make employers liable for defamation based on what they do on the corporate Web site §77% of companies monitor their employees’ communications ~ Lewis 2002

19. 淡江大學資管系所侯永昌 18 Protection of Privacy (1) §Notice/awareness l Consumers must be given notice of an entity’s information practices prior to the collection of personal information l Consumers must be able to make informed decisions about the type and extent of their disclosures based on the intentions of the party collecting the information §Choice/consent l Consumers must be made aware of their options as to how their personal information may be used, as well as any potential secondary uses of the information l Opt-out clause: Agreement that requires computer users to take specific steps to prevent collection of information l Opt-in clause: Agreement that requires computer users to take specific steps to allow collection of information

20. 淡江大學資管系所侯永昌 19 Protection of Privacy (2) §Access/participation l Consumers must be able to access their personal information and challenge the validity of the data §Integrity/security l Consumers must be assured that their personal data are secure and accurate l It is necessary for those collecting data to take whatever precautions are required to ensure that data are protected from loss, unauthorized access, destruction, and fraudulent use, and to take reasonable steps to gain information from reputable and reliable sources §Enforcement/redress l A method of enforcement and remedy must be available; otherwise, there is no real deterrent or enforceability for privacy issues

21. 淡江大學資管系所侯永昌 20 Intellectual Property Rights (1) §Intellectual property: Creations of the mind, such as inventions, literary and artistic works, and symbols, names, images, and designs used in commerce §Copyright: An exclusive grant from the government that allows the owner to reproduce a work, in whole or in part, and to distribute, perform, or display it to the public in any form or manner, including the Internet §Trademark: A symbol used by businesses to identify their goods and services; government registration of the trademark confers exclusive legal right to its use

22. 淡江大學資管系所侯永昌 21 Copyrights Protection Approaches §Using software to produce digital content that cannot be copied l Cryptography l Tracking copyright violations §Digital watermarks: Unique identifiers imbedded in digital content that make it possible to identify pirated works

23. 淡江大學資管系所侯永昌 22 Intellectual Property Rights (2) §The owner of a registered trademark has exclusive rights to: l Use the trademark on goods and services for which the trademark is registered l Take legal action to prevent anyone else from using the trademark without consent on goods and services (identical or similar) for which the trademark is registered

24. 淡江大學資管系所侯永昌 23 Domain Names §Domain name refers to the upper category of an Internet address (URL) l Should additional (new) top-level domain names be added? Council of Registrars (CORE) (European group) and the Global Internet Project (U.S. group) want to increase the number of top-level names One objectives is to create an adult-only top-level name that will keep pornographic material away from children l Can we use of trademarked names that belong to other companies as domain names?

25. 淡江大學資管系所侯永昌 24 Domain Name disputes and resolutions §Major disputes are international in scope, because the same corporate name may be used in different countries by different corporations §Internet community now quickly resolves domain name disputes using arbitration l Disputes.org Consortium l The National Arbitration Forum World Intellectual Property Organization (WIPO)

26. 淡江大學資管系所侯永昌 25 Intellectual Property Rights (3) §Cybersquatting: The practice of registering domain names in order to sell them later at a higher price §Anticybersquatting: Consumer Protection Act of 1999 allows trademark owners sue for statutory damages; e.g., l Juliaroberts.com l Madonna.com

27. 淡江大學資管系所侯永昌 26 Intellectual Property Rights (4) §Patent: A document that grants the holder exclusive rights on an invention for a fixed number of years l Patents serve to protect tangible technological inventions l Patents are not designed to protect artistic or literary creativity l Patents confer monopoly rights to an idea or an invention, regardless of how it may be expressed

28. 淡江大學資管系所侯永昌 27 Intellectual Property Rights (5) §Fan and hate sites l Cyberbashing: The registration of a domain name that criticizes an organization or person l Fan sites may violate the copyrights of the creators or distributors of intellectual property l This issue shows the potential collision between protection of intellectual property and free speech

29. 淡江大學資管系所侯永昌 28 Free Speech vs. Censorship (1) §One of the most important issues of Web surfers is censorship §Censorship—governmental attempts to control broadcasted material §Donham’s First Law of Censorship: “Most citizens are implacably opposed to censorship in any form—except censorship of whatever they personally happen to find offensive”

30. 淡江大學資管系所侯永昌 29 Free Speech vs. Censorship (2) §1998 Children’s Online Protection Act (COPA) required: l Companies verify a viewer’s age before showing online material that is deemed “harmful to minors” l Parental consent is required before personal information can be collected from a minor §Was ruled unconstitutional by the U.S. Supreme Court in 2004

31. 淡江大學資管系所侯永昌 30 Controlling Spam §Spamming: The practice of indiscriminately broadcasting messages over the Internet (e.g., junk mail) §Spam comprises 25 to 50% of all e-mail §Electronic Mailbox Protection Act requires those sending spam to indicate the name of the sender prominently and include valid routing information l Recipients may waive the right to receive such information §ISPs are required to offer spam-blocking software l Recipients have the right to request termination of future spam from the same sender and to bring civil action if necessary

32. 淡江大學資管系所侯永昌 31 Other Legal Issues (1) §Electronic contracts l Uniform Electronic Transactions Act of 1999 extends existing provisions for contract law to cyberlaw by establishing uniform and consistent definitions for electronic records, digital signatures, and other electronic communications Electronic records do satisfy the requirement for a contract Electronic signature is enforceable equal to a written signature on a paper contract

33. 淡江大學資管系所侯永昌 32 Other Legal Issues (2) §Gambling l Internet Gambling Prohibition Act of 1999 Online wagering illegal except for minimal amounts Provides criminal and civil remedies against individuals making online bets or wagers and those in the business of offering online betting or wagering venues

34. 淡江大學資管系所侯永昌 33 Other Legal Issues (3) §Taxing business on the Internet l Internet Tax Freedom Act passed the U.S. Senate on October 8, 1998 Barred any new state or local sales taxes on Internet transactions until October 2001 (extended by US Congress to 2006) Created a special commission to study Internet taxation issues and recommend new policies l Tax-free policies may give online businesses an unfair advantage—Internet businesses should pay their fair share of the tax bill for the nation’s social and physical infrastructure

35. 淡江大學資管系所侯永昌 34 EC Fraud §Online auction fraud—87% of online crime §Internet stock fraud—spread false positive rumors about the prospects of companies §Other financial fraud l Bogus investments l Phantom business opportunities §Other fraud in EC—nonfinancial fraud l Customers receive poor-quality products and services l Customers do not get products in time l Customers are asked to pay for things they assume will be paid for by sellers

36. 淡江大學資管系所侯永昌 35 Consumer Protection (1) §Make sure that they enter the real Web site of well-known companies §Search any unfamiliar site for an address and telephone and fax numbers and call §Check out the seller with the local chamber of commerce, BBB, or TRUSTe §Investigate how secure and organized the seller’s site is §Examine the money-back guarantees, warranties, etc. §Compare prices online to those in regular stores §Ask friends what they know, look for testimonials and endorsements §Find out what redress is available in case of a dispute §Consult the National Fraud Information Center (fraud.org) §Check the resources available at consumerworld.org

37. 淡江大學資管系所侯永昌 36 Consumer Protection (2) §Third-party assurance services l TRUSTe (truste.org) l Better Business Bureau (bbbonline.com) l WHICHonline (which.net) l Web Trust seal (TRUSTe, cpawebtrust.org, Gomez.com) l Online Privacy Alliance l Evaluation by consumers—product and vendor evaluations groups.google.com, epubliceye.com

38. 淡江大學資管系所侯永昌 37 Seller Protection (1) §Authentication and biometric controls provide l Access procedures that match every valid user with a unique user identifier (UID) l Authentication method that verifies that users requesting access to the computer system are really who they claim to be l Are valid for both consumer and merchant protection

39. 淡江大學資管系所侯永昌 38 Seller Protection (2) §Seller protection against: l Customers who deny that they placed an order l Customers who download copyrighted software, etc. and sell it to others l Customers who give false payment information l Use of their name by others l Trademark protection

40. 淡江大學資管系所侯永昌 39 Seller Protection (3) §What can sellers do? l Use intelligent software to identify possibly questionable customers l Identify warning signals for possibly fraudulent transactions l Ask customers whose billing address is different from the shipping address to call their bank and have the alternate address added to their bank account

41. 淡江大學資管系所侯永昌 40 Societal Issues (1) §Digital divide: The gap between those who have and those who do not have the ability to access electronic technology in general, and the Internet and EC in particular §Education l Virtual universities l Companies use the Internet to retrain employees l Home-bound individuals can get degrees

42. 淡江大學資管系所侯永昌 41 Societal Issues (2) §Public safety and criminal justice l E-911 systems l Global collaborative commerce l E-procurement l E-government—coordinating, information sharing, and expediting legal work and cases l Intelligent homes, offices, and public buildings l E-training of law enforcement officers

43. 淡江大學資管系所侯永昌 42 Societal Issues (3) §Health aspects l Safer and healthier to shop from home than to shop in a physical store l Some believe that exposure to cellular mobile communication radiation may cause health problems l Collaborative commerce can help improve health care

44. 淡江大學資管系所侯永昌 43 Virtual (Internet) Communities (1) §A group of people with similar interests who interact with one another using the Internet §Characteristics of virtual communities l Internet communities may have thousands or even millions of members l Few online communities are geographically confined §The gathering of needs in one place enables vendors to sell more and community members to get discounts

45. 淡江大學資管系所侯永昌 44 Virtual (Internet) Communities (2) §How to transform a community site to a commercial site: l Understand a particular niche industry l Build a site that provides that information l Set up the site to mirror the steps a user goes through in the information-gathering and decision-making process l Build a community that relies on the site for decision support l Start selling products and services that fit into the decision-support process

46. 淡江大學資管系所侯永昌 45 Virtual (Internet) Communities (3) §Financial viability of communities l Revenue model of communities can be based on: Sponsorship Membership fees Sales commissions Advertising §The operating expenses for communities are very high due to the need to provide fresh content and free services §Most communities initially provide free membership §The objective is to have as many registered members as possible and to build a strong brand in order to attract advertisers

47. 淡江大學資管系所侯永昌 46 Virtual (Internet) Communities (4) §Key strategies for successful online communities: Increase traffic and participation in the community Focus on the needs of the members; use facilitators and coordinators Encourage free sharing of opinions and information—no controls Obtain financial sponsorship. This factor is a must. Significant investment is required Consider the cultural environment

48. 淡江大學資管系所侯永昌 47 Virtual (Internet) Communities (5) §Key strategies for successful online communities: (cont.) Provide several tools and activities for member use; communities are not just discussion groups Involve community members in activities and recruiting Guide discussions, provoke controversy, and raise sticky issues. This keeps interest high

49. 淡江大學資管系所侯永昌 48 The Future of EC (1) §Nontechnological success factors: l Internet usage l Opportunities for buying l M-commerce l Purchasing incentives l Increased security and trust l Efficient information handling l Innovative organizations l Virtual communities l Payment systems

50. 淡江大學資管系所侯永昌 49 The Future of EC (2) §Nontechnological success factors: (cont.) l B2B EC l B2B exchanges l Auctions l Going global l E-government l Intrabusiness EC l E-learning l EC legislation

51. 淡江大學資管系所侯永昌 50 The Future of EC (3) §EC technology trends: l Clients l Embedded clients l Pervasive computing l Wireless communications and m-commerce l Wearable devices l Servers and operating systems l Networks l EC software and services

52. 淡江大學資管系所侯永昌 51 The Future of EC (4) §EC technology trends: (cont.) l Search engines l Peer-to-peer technology l Integration l Web services l Software agents l Interactive TV l Tomorrow’s Internet

53. 淡江大學資管系所侯永昌 52 The Future of EC (5) §Integrating the marketplace and marketspace: l The most noticeable integration of the two concepts is in the click-and-mortar organization Some organizations will use EC as just another selling channel Others will use EC for only some products and services

54. 淡江大學資管系所侯永昌 53 The Future of EC (6) §Integrating the marketplace and marketspace: (cont.) l A major problem in the click-and-mortar approach is how the two outlets can cooperate in: Planning Advertising Logistics Resource allocation Alignment of strategic plans of the marketspace and marketplace

55. 淡江大學資管系所侯永昌 54 The Future of EC (6) §Integrating the marketplace and marketspace: (cont.) l Conflict with existing distribution channels l Coexistence in B2C ordering systems l The impact of EC on our lives may be as much or more profound than that of the Industrial Revolution

56. 淡江大學資管系所侯永昌 55 Managerial Issues §What sorts of legal and ethical issues should be of major concern to an EC enterprise? §What are the most critical ethical issues? §Should we obtain patents? §What impacts on business is EC expected to make? §Do we have a community?

57. 淡江大學資管系所侯永昌 56 Summary §Differences between legal and ethical issues §Protecting privacy in EC §Intellectual property rights in EC §Conflict between free speech and censorship §Legal issues §Protecting buyers and sellers online §Societal issues and EC §The role of virtual communities §The future of EC