Ecommerce CH.8

Chapter 8: Ethical, Social, and Political Issues in E-Commerce

Learning Objectives

  • 8.1 Understand why e-commerce raises ethical, social, and political issues.

  • 8.2 Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy.

  • 8.3 Understand the various forms of intellectual property and the challenges involved in protecting it.

  • 8.4 Understand how the Internet is governed and why taxation of e-commerce raises governance and jurisdiction issues.

  • 8.5 Identify major public safety and welfare issues raised by e-commerce.

The Right to Be Forgotten

  • Discussion Questions:

    • Is Google responsible for the accuracy of links to other information?

    • 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?

Understanding Ethical, Social, and Political Issues

  • The Internet enables:

    • New crimes

    • Environmental impacts

    • Threats to social values

  • Costs and benefits must be weighed carefully without clear legal or cultural guidelines.

Model for Organizing Issues

  • Issues can be viewed at different levels:

    • Individual

    • Social

    • Political

  • Four major categories:

    • Information rights

    • Property rights

    • Governance

    • Public safety and welfare

Basic Ethical Concepts

  • Ethics: Study of principles determining right and wrong actions.

  • Key concepts:

    • Responsibility

    • Accountability

    • Liability: Laws to recover damages.

    • Due process: Knowledge of laws, ability to appeal.

Analyzing Ethical Dilemmas

  1. Identify and describe the facts.

  2. Define the conflict/dilemma and higher-order values.

  3. Identify the stakeholders.

  4. Identify reasonable options.

  5. Identify potential consequences of options.

Candidate Ethical Principles

  • Golden Rule

  • Universalism

  • Slippery Slope

  • Collective Utilitarian Principle

  • Risk Aversion

  • No Free Lunch

  • The New York Times Test

  • The Social Contract Rule

Privacy and Information Rights

  • Privacy: Moral right to be left alone; freedom from surveillance.

  • Information privacy premises:

    • Right to control personal information.

    • Right to consent when information is collected.

    • Right to due process regarding personal information.

    • Right for secure storage of personal information.

FTC's Fair Information Practice Principles

  • Notice/Awareness: Disclosure of information practices before data collection.

  • Choice/Consent: Choice regime for secondary use of information.

  • Access/Participation: Ability to review and contest data accuracy.

  • Security: Reasonable steps to ensure data accuracy and security.

  • Enforcement: Mechanism for enforcing principles, self-regulation, or legislative action.

Public Sector Privacy Rights

  • Historical context:

    • First, Fourth, and Fourteenth Amendments.

    • 1974 Privacy Act.

    • Protections against unreasonable government intrusion.

Private Sector Privacy Rights

  • Rise of privacy issues with large-scale computerized systems (e.g., credit ratings).

  • Emergence of the Internet increased personal data collection.

  • Companies like Google, Amazon exploiting huge data collections.

Data Collected by Websites

  • Personally Identifiable Information (PII) and Anonymous Information:

    • Data types: Name, address, email, Social Security number, etc.

Key Issues in Online Privacy

  • Top Concerns:

    • Profiling and ad targeting

    • Social network privacy

    • Marketer information sharing

    • Mobile privacy

  • Less Concerned About:

    • Employee monitoring

    • Health information sharing

    • Surveillance for terrorism prevention.

Marketing and Privacy

  • Profiling: Creating data representations of behavior.

  • Advertising networks track browsing behavior, dynamically adjusting user experiences.

  • Critics: Platforms undermine anonymity, promote price discrimination.

Social Networks and Privacy

  • Social Networks: Encourage personal detail sharing.

  • Unique challenges: Facebook's surveillance features and ad strategies.

  • Tension between personal control and monetization by organizations.

Mobile Devices Privacy Issues

  • Smartphone apps: Collect user data, track locations.

  • Supreme Court ruling: Warrant required for cell phone information searches.

Consumer Privacy Regulation by FTC

  • Fair Information Practice principles focus on informed consent, harm-based approaches, and transparency.

Federal Communications Commission (FCC) Regulations

  • Broadband ISPs classified like public utilities; must notify users about privacy practices.

Privacy Policies

  • Complexities in readability; conflicting statements; minimal oversight.

European Data Protection

  • Stronger privacy protections compared to the U.S.

  • Key Regulations: General Data Protection Regulation (GDPR), Safe Harbor provisions.

Industry Self-Regulation

  • Initiatives such as Online Privacy Alliance (OPA) and TRUSTe for self-regulation.

Technology Solutions for Privacy

  • Use of blockers, encryption tools; none solve core privacy issues.

Privacy Protection Challenges

  • Increased surveillance from government and corporations; notable cases like NSA's Prism.

Insight on Technology: Privacy Perspectives

  • Discussion on Apple vs. Facebook's privacy approaches.

Intellectual Property Rights

  • Intellectual Property (IP): Products of the human mind; ethical and social importance of IP protection.

Intellectual Property Protection Types

  • Types: Copyright, Patent, Trademark.

  • Balancing public and private interests remains a challenge with advancements in technology.

Copyright Laws

  • Protects original expressions; includes fair use doctrine.

  • Digital Millennium Copyright Act (DMCA): Adjusts copyright laws to accommodate the Internet.

Patents

  • Grant 20-year monopolies; promotes dissemination of innovations, but stifles competition.

E-Commerce Patents

  • Examples include business method patents; limitations on patentability of basic ideas.

Trademarks

  • Protects brands and consumer expectations against unfair practices.

  • Issues around digital trademark infringement, cybersquatting.

Trade Secrets

  • Addressing business processes and protection measures.

Internet Governance

  • Blend of regulation and self-regulation; ICANN role in domain name system.

Taxation Challenges

  • Non-local nature of e-commerce complicates governance.

Internet Sales Tax Discussion

  • Considerations on consumer location vs. seller's location for tax purposes.

Net Neutrality

  • Equal internet access charges; implications for user content delivery.

Public Safety and Welfare Concerns

  • Protecting against online risks and gambling issues.

Insight on Society: Internet Drug Bazaar

  • Discussion on traditional pharmacies versus online pharmacies and regulatory challenges.