1. ELC 200 Day 21

2. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 2 Agenda Assignment #7 emailed to you in WebCt –Due April 9 at the beginning of class Quiz 3 will be on April 13 –Chap 8-12 –15 M/C (60 Points), 4 Short Essay (40 Points) Extra credit --- What is the derivation of the name “cookie” used by Internet Browsers? Discussion on Legal, Ethical and International Issues

3. Chapter 12 Legal, Ethical, And International Issues

4. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 4 OBJECTIVES Ethical Issues –What is Ethics? –Major Threats –Improving the Climate –Code of Ethics –Self-Assessment –Privacy Factor Legal Issues –Liability Question –Basis of Liability –Copyrights and Trademarks –Website – Product / Service? –Warranties –Strict Liability –Taxation Issues

5. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 5 WHAT IS ETHICS? Fairness, justice, equity, honesty, trustworthiness and equality Subjective B D C A Legal ImmoralMoral Illegal

6. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 6 MAJOR THREATS Faster computers and networks Sophisticated telecommunications and routers Massive distributed databases Eases of access to information and knowledge base Transparency of software

7. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 7 IMPROVING THE CLIMATE Top management support Code of ethics Ethics training program Motivation to focus on honesty and integrity

8. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 8 WHERE TO START Bottom-up –Inculcates ethics behavior at the employee level with full support of top management Top-down –The actions of the company start with the CEO –Extend to a variety of stakeholders

9. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 9 CODE OF ETHICS A declaration of principles and beliefs that govern how employees of a corporation are to behave Inspirational and disciplinary All-encompassing and stable over time

10. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 10 SELF-ASSESSMENT A question-and-answer procedure Allows individuals to appraise and understand their personal knowledge about a particular topic An educational experience

11. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 11 PRIVACY FACTOR Notice –Right to be told in advance Choice –Final say regarding the use of personal info Access –Access and correct any personal info Security/integrity Enforcement –Backed by the courts if any principles are violated

12. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 12 Agenda Assignment #7 Due –We will discuss prior to next quiz Quiz 3 will be on April 13 –Chap 8-12 –15 M/C (60 Points), 4 Short Essay (40 Points) Extra credit --- What is the derivation of the name “cookie” used by Internet Browsers? Discussion on Legal, Ethical and International Issues

13. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 13 THE LIABILITY QUESTION Liability of Designer –Nontrivial errors –Out-of-bound errors –May be mitigated by principle of respondent superior Liability of User –Passive negligence Basis of Liability –Tort law (Civil versus criminal actions) –Product Liability Designer or Manufacturer of Product is liable –Strict Liability Seller is liable

14. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 14 TORT LAWS ON INTERNET Settling contract problems between e-merchants and ISP –No regulatory body Fraud –intent to deceive Negligence –failing to make certain action causing injury/material losses False advertising –Lack of availability of Product Misrepresentation –claiming a product will perform certain functions when it could not Trademark violations –under intellectual property law

15. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 15 WEB SITE – PRODUCT/SERVICE? Product –Software sold off-the-shelf –Uniform Commercial Code (UCC) allows developer to limit liability for defective Web sites though a disclaimer of warranties Service –Custom-designed software –Negligence principles should be used

16. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 16 WARRANTIES Assurance made by seller about the goods sold Express warranty –Offered orally or in writing by maker of products Implied warranty –Arises automatically when a sale is made –Merchantability Disclaimer –Seller’s intention to protect the business from unwanted liability Legal –Magnuson-Moss Consumer Product Warranty Act (1975) –Universal Commercial Code (UCCC) –Maine Consumer code http://www.state.me.us/ag/index.php?r=clg&s=chap4

17. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 17 COPYRIGHT Copyrights –Ownership of an original work created by an author –A form of intellectual property protection covers the “look and feel” and content of printed media –Gives author the right to exclude others from using the finished work –Good for life of its author + 70 years

18. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 18 TRADEMARK/TRADE NAME A word/symbol distinguishing a good from other goods in the market A maze of federal and state laws Ownership –Web designer – “work made for hire”

19. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 19 STRICT LIABILITY Joint liability for developers, manufacturers and distributors if tort theory applies Protects Web visitor regardless of whether anyone is at fault

20. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 20 TAXATION ISSUES Controversial –Different jurisdiction –Consumers’ reaction Legal –Internet Tax Freedom Act No taxes till 2001 –Internet Nondiscrimination Act of 2000 No taxes till 2006 (5 year extension)

21. Chapter 12 Legal, Ethical, And International Issues