ETHICAL, SOCIAL, AND POLITICAL ISSUES IN E-COMMERCE

Chapter 8

Learning Objectives

Recognize the main ethical, social, and political issues raised by e-commerce Understand how individual privacy is impacted by e-commerce Understand the various forms of intellectual property and the challenges involved in protecting it Understand how governance of the Internet has changed over time

Why does e-commerce raise ethical, social, and political issues?

Part of the answer lies in the underlying features of the Internet technology itself, and the ways in which it is exploited by organizations and other individuals Internet technology and its use in e-commerce disrupt existing social and organizational relationships and understanding

Unique Features of E-Commerce Technology and their Potential Ethical, Social, and Political Implications (Table 8.1)
E-Commerce Technology Dimension
Ubiquity

Potential Ethical, Social, and Political Significance

Work and shopping can invade family life Shopping can distract workers at work lowering productivity Use of mobile devices can lead to automobile or industrial accidents Reduces cultural diversity in products Weakens local small firms while strengthening large global firms Easier to move manufacturing to low-wage areas of the world Weakens nations abilities to control information Increases vulnerability to viruses and hacking Increases the likelihood of information crime

Global reach

Universal standards

Unique Features of E-Commerce Technology and their Potential Ethical, Social, and Political Implications (cont.)
E-Commerce Technology Dimension
Richness

Potential Ethical, Social, and Political Significance

Reduces use of text and potentially the ability to read Enables development of persuasive messages that may reduce reliance on multiple independent sources of information Interaction with commercial sites may be shallow and meaningless Customers do not really co-produce the product Amount of customization is minimal Increases virtual interaction which may reduce face-to-face interaction Total amount of information increases, but so does the possibility of false or misleading information, unwanted information, and invasion of solitude Overall information quality may decline Individual information overload

Interactivity

Information density

Unique Features of E-Commerce Technology and their Potential Ethical, Social, and Political Implications (cont.)
E-Commerce Technology Dimension
Personalization/ customization Social technology

Potential Ethical, Social, and Political Significance

Opens up the possibility of intensive invasion of privacy for commercial and governmental purposes that is unprecedented Creates opportunities for cyberbullying, abusive language, and predation Creates new challenges to privacy

A Model for Organizing the Issues

Privacy and Information Rights

Privacy is the moral right of individuals to be left alone, free from surveillance or interference from other individuals or organizations, including the state Information privacy is a subset of privacy Important issues:
What

information is collected? Is the information personally identifiable? How is the information collected?

The Internets Major Information Gathering Tools (Table 8.3)

Advertising networks Social networks Cookies Spyware Search engine behavioral targeting Shopping carts Forms Site transaction logs

Search engines Digital wallets (single sign-on services) Digital rights management (DRM) Trusted computing environments

Legal Protections

In the US, Canada, and Germany, rights to privacy are explicitly granted in, or can be derived from, founding documents such as constitutions In England and the US, there is also protection of privacy in the common law (a body of court decisions) Federal and state privacy laws are summarized in Table 8.4

Privacy Protection Concepts

Informed consent Opt-in vs. opt-out FTCs fair information practice principles:
Notice/awareness Choice/consent Access/participation consumers should be able to review and contest accuracy and completeness of data about them Security must take reasonable steps to ensure accuracy and security of data Enforcement must be a mechanism in place to enforce FIP

FTC Recommendations Regarding Online Profiling (Table 8.6)

Notice

Complete transparency to user by providing disclosure and choice options

Opt-in for PII, opt-out for non-PII

Choice

Access Security Enforcement

Done by third parties No collection of information about sensitive financial or medical topics, sexual behavior or sexual orientation, or use of SSNs

Restricted collected

Intellectual Property Rights

Once intellectual works become digital, it becomes difficult to control access, use, distribution, and copying The major ethical issue related to e-commerce and intellectual property concerns how we (individuals and organizations) should treat property that belongs to others There are three main types of intellectual property protection:
Copyrights

Patents
Trademarks

Copyrights

In the US, copyright law protects original forms of expression such as writings (books, periodicals, lecture notes), art, drawings, photographs, music, motion pictures, performances, and computer programs from being copied by others for a period of time

Copyright protection is for a period of 95 years for corporate-owned works, and life plus 70 years for works created by individuals Since the first federal Copyright Act of 1790, the intent behind copyright laws has been to encourage creativity and authorship by ensuring that people receive financial and other benefits from their work

Fair Use Doctrine

There are situations where strict copyright observance could be harmful to society, potentially inhibiting other rights such as right to freedom of expression or thought The doctrine of fair use permits teachers and writers to use copyrighted materials without permission under certain circumstances (fair use):

Character of use Nature of the work Amount of work used Market effect of use Context of use

The Digital Millennium Copyright Act (DMCA) of 1998

The Digital Millennium Copyright Act (DMCA) of 1998 is the first major effort to adjust the copyright laws to the Internet age For example, the DMCA includes sections that:
Makes

it illegal to circumvent technological measures to protect works Requires ISPs to take down sites they host if they are infringing on copyrights Permits users to make a copy of software for maintenance or repair of the computer Allows libraries to make digital copies of works for internal use Extends musical copyrights to include webcasting

Patents

whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent thereof, subject to the conditions and requirements of this title. Section 101, U.S. Patent Act A patent grants the owner a 20-year exclusive monopoly on the ideas behind an invention What are some examples of patentable e-commerce processes? Why are e-commerce patents so controversial? A list of selected e-commerce patents is in Table 8.11

Trademarks

A trademark is any word, name, symbol, or device, or any combination thereof used in commerce to identify and distinguish goods from those manufactured or sold by others and to indicate the source of the goods. The Trademark Act, 1946 Trademarks and the Internet issues
Cybersquatting

Cyberpiracy
Metatagging

and keywording Linking and framing

Governance

Governance of both the Internet and ecommerce has gone through four stages:
Government

control period (1970-1994) Privatization (1995-1998) Self-regulation (1995-present) Governmental-regulation (1998-present)

What are the benefits of stronger Internet regulation? What are the benefits of reduced regulation? Other issues include taxation and Net neutrality