1. Lecture 5 ref: Chapter 16 Regulatory, Ethical, and Compliance Issues in EC PREPARED BY L. Nouf Almujally 1

2. Copyright © 2010 Pearson Education, Inc. Learning Objectives 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. Describe the needs and methods to protect sellers. 5. Describe EC-related societal issues. 6. Describe Green EC and IT. 16-2

3. Copyright © 2010 Pearson Education, Inc. 16.1 The Complexity of Legal and Regulatory Issues  intellectual property Creations of the mind, such as inventions, literary and artistic works, and symbols, names, images, and designs, used in commerce  Why are laws subject to interpretation Most laws and regulations are broadly written and, therefore, only provide outlines to guide public policy. 16-3

4. Copyright © 2010 Pearson Education, Inc.  intellectual property law Area of the law that includes patent *1 law, copyright law, trademark law, trade secret law, and other branches of the law such as licensing and unfair competition _________________________________ 1 * براءة الاختراع 16-4 16.2 Civil Law, Intellectual Property Law, Common Law, and EC Legal Issues

5. Copyright © 2010 Pearson Education, Inc.  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 16-5 16.2 Civil Law, Intellectual Property Law, Common Law, and EC Legal Issues

6. Copyright © 2010 Pearson Education, Inc.  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 16-6 16.2 Civil Law, Intellectual Property Law, Common Law, and EC Legal Issues

7. Copyright © 2010 Pearson Education, Inc.  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 16-7 16.2 Civil Law, Intellectual Property Law, Common Law, and EC Legal Issues

8. Copyright © 2010 Pearson Education, Inc.  COMMON LAW IN E-COMMERCE common law (case law) Law created by judges in court decisions  FAN AND HATE SITES Independent websites that express strong opinions about their like or dislike of products, services and individuals. – cyberbashing Domain name that criticizes an organization or person 16-8 16.2 Civil Law, Intellectual Property Law, Common Law, and EC Legal Issues

9. 9 Copyright © 2010 Pearson Education, Inc.

10. 16.3 Ethical Challenges and Guidelines  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  business ethics A form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment 16-10

11. Copyright © 2010 Pearson Education, Inc.  EC ETHICAL ISSUES Non–Work-Related Use of the Internet Most employee use e-mail and surf on the web for non-work-related purpose Codes of Ethics A practical and necessary approach to limiting non-work-related Internet surfing is an Internet acceptable use policy (AUP) to which all employees must conform. 16-11 16.3 Ethical Challenges and Guidelines

12. Copyright © 2010 Pearson Education, Inc. 16.4 Privacy Rights, Protection, and Free Speech  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 16-12

13. Copyright © 2010 Pearson Education, Inc.  HOW INFORMATION ABOUT INDIVIDUALS IS COLLECTED 1. Web Site Registration By filling registration forms ( name, telephone#, email, …etc.) 2. Cookies 3. spyware All unwanted software programs designed to steal proprietary information, or that target data stores containing confidential information 16-13 16.4 Privacy Rights, Protection, and Free Speech

14. Copyright © 2010 Pearson Education, Inc. 4. Site transaction logs The usage patterns of how people surfing the internet 5. EC ordering systems and shopping carts Let people know what you ordered, when, from whom, and how much you paid 6. Search engines Collect information about your search, chatting and blogging 7. Behavioral targeting Uses tools for collaborative filtering and analysis of user data 8. Payment information and e-wallets 16-14 16.4 Privacy Rights, Protection, and Free Speech

15. Copyright © 2010 Pearson Education, Inc.  PRIVACY PROTECTION BY INFORMATION TECHNOLOGIES Encryption : software for encrypting emails, and other documents. Spam blocking : built into browsers and email; blocking pop- up and unwanted mails Spyware blocking : detect and remove spyware and adware Cookie managers : prevent the computer from accepting cookies  PRIVACY ISSUES IN WEB 2.0 TOOLS AND SOCIAL NETWORKS Presence, Location, and Privacy 16-15 16.4 Privacy Rights, Protection, and Free Speech

16. Copyright © 2010 Pearson Education, Inc. 16.5 Consumer and Seller Protection from Online Fraud CONSUMER (BUYER) PROTECTION  Representative Tips and Sources for Your Protection User should make sure that they enter the real Web site of well-known company by going directly to the site rather than through a link. Examine the money-back guarantees, warranties, and service agreements before making a purchase Compare prices online with those in regular stores Ask friends what they know 16-16

17. Copyright © 2010 Pearson Education, Inc. 16.5 Consumer and Seller Protection from Online Fraud  Third-Party Assurance Services Several public organizations and private companies attempt to protect consumers. Ex. Better Business Bureau (BBB)  Computer Fraud and Abuse Act (CFAA) Major computer crime law to protect government computers and other Internet-connected computers 16-17

18. Copyright © 2010 Pearson Education, Inc. SELLER PROTECTION What Can Sellers Do? Sellers should follow best practices including: 1. verifying credit card information 2. watching for warning signals 3. ensuring delivery to approved addresses. 16-18 16.5 Consumer and Seller Protection from Online Fraud

19. Copyright © 2010 Pearson Education, Inc. PROTECTING BUYERS AND SELLERS: ELECTRONIC AND DIGITAL SIGNATURES o electronic signature A generic, technology-neutral term that refers to the various methods by which one can “sign” an electronic record types : the image of a signature, PIN number, Code, Digital signature, fingerprint 16-19 16.5 Consumer and Seller Protection from Online Fraud

20. Copyright © 2010 Pearson Education, Inc. o Authentication and Biometric Controls - Authentication is the process through which you can confirm with whom you are communicating. - Biometric controls provide access procedures that match every valid user with a unique user identifier (UID). They also provide an authentication method that verifies that users requesting access to the computer system are really who they claim to be. 16-20 16.5 Consumer and Seller Protection from Online Fraud

21. Copyright © 2010 Pearson Education, Inc.  How EC can improve education. EC technologies can give access to information that was difficult or expensive to access in the past.  How EC can improve Public safety and security. EC technologies can allow for better monitoring of individuals and property. Ex. E-922, e-procurement, e-government  How EC can improve health services. EC technologies allow for the better filing and cross- referencing of records. Ex. Delivery of health care from distance 16-21 16.6 Societal Issues and Green EC

22. 22 Copyright © 2010 Pearson Education, Inc.